Philippines' January inflation at 4.2 pct


Posted at Feb 05 2014 10:49 AM | Updated as of Feb 05 2014 06:49 PM

MANILA - The Philippines' consumer price index rose 4.2 percent in January from a year earlier, matching the median forecast in a Reuters poll and supporting views the central bank will stand pat on rates at a policy meeting on Thursday.

The January rate was near the upper end of the central bank's 3.4 to 4.3 percent estimate for the month.

Food and non-alcoholic beverages posted the biggest increase among the commodity groups, rising an annual 5.5 percent in January against 4.8 percent in December. Food alone climbed 5.7 percent, compared with 5.0 percent the previous month.

Housing, water, electricity, gas and other fuels climbed an annual 3.5 percent, matching the rise seen in December.

Economists in a Reuters quarterly survey last month forecast inflation to average 4.0 percent this year, higher than last year's 3.0 percent but still within the central bank's 3-5 percent target range.

The poll showed economists expect the central bank to start raising its key policy rate in the third quarter.

Governor Amando Tetangco told Reuters on Monday the central bank will not resort to drastic policy action to stem the peso's slide, but it will be present in the foreign exchange market to smoothen sharp swings in the currency.

The economy grew nearly twice as fast as expected in the fourth quarter from the previous three months despite a devastating typhoon, suggesting growth will remain robust this year and buffer the country from further turmoil in global emerging markets.

The government is targeting 6.5 to 7.5 percent growth in 2014.