PhilippineBusiness.com.ph: Surveys & Forecasts: Montly Inflation Forecast

30 July 2004 -- MBC Research forecasts a 5.5%-6.0% inflation rate in July from 5.1% in June with higher food prices and minimum wage in Metro Manila. Fuel pump prices remained stable despite a decline in the average crude oil price abroad.

At the same time, MBC Research has revised its 2004 inflation rate forecast to 4.9%-5.2% from 3.3%-3.9% on account of rising fuel prices. For 2005, the average inflation rate is projected to rise to 5.3%.

July 2, 2004 – Higher prices of fuel, food, land transport, utilities and other basic commodities as well as the rising cost of education could have pushed inflation up to 4.8 percent in June from 4.5 percent in May. At the low end, MBC Research projects June inflation at 4.4 percent. A year ago, the country’s inflation rate was lower at 3.4 percent. In the first five months, inflation has averaged 3.8 percent compared to 2.8 percent in the same period last year.

The peso-dollar reference rate also weakened 0.2 percent to an average of P55.985/US$ in June from P55.846/US$ in May. Abroad, average Dubai crude prices softened 11.4 percent to US$33.43 per barrel from US$37.74 per barrel. Likewise, international contract prices of liquefied petroleum gas rose 9.4 percent to US$350 per metric ton from US$320 per metric ton.

As of May, the country’s domestic liquidity growth has slowed down to 6.1% from 6.4% in April. A day earlier, the Monetary Board decided to keep Bangko Sentral’s key policy interest rates steady despite an uptick in Federal Reserve interest rates in the United States.