Year-on-year headline inflation averaged 3.2 percent for the whole year of 2009, well within the Government’s target range of 2.5-4.5 percent for the year. As expected, December inflation was higher at 4.4 percent compared to 2.8 percent in November. The BSP’s forecast range for inflation in December was 3.7-4.6 percent. Core inflation, which excludes some food and energy items to measure generalized price pressures, was also higher in December at 3.2 percent from 2.7 percent in November. Meanwhile, month-on-month headline inflation in December was unchanged from the November level of 0.6 percent.
Inflation pressures in December were traced mainly to higher prices of petroleum products after the price cap on these items was lifted in mid-November. Meat and rice prices were also higher in December as the recent weather disturbances that visited the country continued to have an adverse impact on the supply of these products. Meanwhile, light inflation remained negative in December, albeit less negative than the rate in the previous month.
Governor Amando M. Tetangco, Jr. noted that latest inflation forecasts of the BSP also show within-target inflation rates for 2010 and 2011. Moving forward, he said that the BSP will continue to ensure the stability of prices over the policy horizon and at the same time remain supportive of the liquidity requirements of the economy.