January inflation seen to range from 3.6% to 4.5%

The rate of rise in commodity prices is expected to range from 3.6 percent to 4.5 percent year-on-year, according to the Bangko Sentral ng Pilipinas.

BSP Governor Amando M. Tetangco Jr. Friday said that inflation in January would remain manageable as increases in the prices of select fruits and vegetables were likely offset by reductions in utility charges.

“The BSP will remain watchful of local and global developments that could create price pressures to ensure that our policy settings remain appropriate,” Tetangco said.

Earlier this month, Singapore-based DBS Group said in a research note that Philippine headline inflation has already started to trend lower after peaking at 5.2 percent year-on-year last October.

Data from the National Statistics Office show that the rate of rise in consumer prices, based on 2006 rates, settled at 4.2 percent in December, bringing the 2011 average to 4.8 percent.

“Price pressures in the coming months should remain benign amid a slowing global economy,” the DBS said. “Higher food prices from crop damage notwithstanding, we expect headline inflation to trend toward 4 percent by March.”

The financial services firm expects inflation to average at around 4 percent for the full year.

Also, the BSP hopes to temper inflation in 2012, capping it between 3 percent and 5 percent, the same as last year.

Results for December fell at the lower end of the BSP’s forecast range of 4 percent to 4.9 percent.

“This adds to our confidence regarding our assessment that inflation remains manageable over the policy horizon,” Tetangco had said. “We continue to be mindful of global developments, particularly geopolitical disturbances in the Middle East that may negatively impact on the current sanguine outlook.”

He added that the BSP would make adjustments as necessary to ensure that interest rates remained “appropriate.”  Ronnel W. Domingo