December inflation picks up to 2.9%


Posted at Jan 04 2013 09:40 AM | Updated as of Jan 04 2013 10:12 PM

MANILA - The Philippines' annual inflation rate was 2.9 percent in December, below market forecasts and picking up from the previous month's pace of 2.8 percent, data from the statistics office on Friday showed.

The median forecast in a Reuters poll of 10 economists was for annual inflation of 3.1 percent in December.

The central bank had forecast an inflation rate of between 2.6 percent to 3.5 percent in the month.

The central bank, which cut its benchmark rate by a total of 100 basis points last year, expects price pressures to remain manageable in the next two years. Last month, it trimmed its 2013 inflation forecast to 3.1 percent from 3.9 percent and its 2014 forecast to 2.9 percent from 3.1 percent.

It set an inflation target of 2 percent to 4 percent for 2015-2016, lower than the 3 percent to 5 percent goal set for 2012-2014.

After posting the second strongest annual economic growth in Asia of 7.1 percent in the third quarter, the Philippines now expects full-year 2012 growth at around 6.5 percent. It sees growth in 2013 at between 6 percent and 7 percent, driven by domestic consumption and higher government spending.