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| Archive > Monthly Inflation Forecast |
| April inflation to reach 3.7% |
April 25, 2002 - The inflation rate is expected
to rise to 3.7% to 3.8% in April from an average of 3.6% in
the first quarter. Domestic air fares have increased 10% in
the first week of April. In the second week oil companies hiked
their fuel pump prices by an average of P0.45 to P0.50 per liter.
Many transport groups, however, continued to hold back their
petition for fare hikes. Another round of oil price hikes averaging
P0.37 per liter took place in the fourth week. Both price adjustments
combined are still below the P1.35 per liter hike estimated
by oil industry players. An embargo of Iraq oil exports to the
U.S. over the Israeli-Palestinian situation brought the average
Dubai crude oil price up to US$24.35 per barrel as of April
23 from US$22.40 per barrel in March. In April 2001, the benchmark
crude price was US$24.18 per barrel.
Basic commodities monitored by the Departments of Agriculture
and Trade and Industry, however, have generally remained stable.
As of April 23, ordinary rice can be bought at P15 to P19 a
kilo in Metro Manila. Rolling stores operated by the National
Food Authority are mandated to sell ordinary rice at P14 a kilo.
Prices of string beans, tomatoes, bananas, calamansi, and refined
sugar have increased slightly. On the other hand, prices of
cabbage, carrots, red onions, pechay, carabao mango, and galunggong
have softened.
The dry season has encouraged construction activities, driving
up demand for cement, and pushing up the cost of housing and
repairs. Furthermore, medicines, a small component under services
in the consumer price index, are now sold in government hospitals
at half their price a year ago. Consumers also expect relief
from rising electricity rates since the issue of purchased power
cost adjustment is now under review by Congress and the Department
of Energy.
Meanwhile, the pick up in inflation last March is accompanied
by signs that show domestic demand is already improving. For
instance, growth of money supply M3 or domestic liquidity already
started to accelerate to 7.2% in February from 5.2% in January.
Other indicators include bullish stock market trading, increased
consumer confidence in terms of car and appliance sales, and
an uptick in manufacturing value of production. |
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