Q4 inflation at 2.9%; BSP says worries not well placed

ABS-CBN News

Posted at Jan 28 2011 11:04 PM | Updated as of Jan 29 2011 07:16 AM

MANILA, Philippines - Consumer prices grew by 2.9% in the last quarter of 2010, according to a report released by the Bangko Sentral ng Pilipinas on Friday, Jan. 28.

Since the inflation rate in the fourth quarter was slower than the 3.8% rate in the third quarter, the BSP emphasize that there is nothing to fear on consumer prices.

BSP deputy governor Diwa Guinigundo took this favorable inflation report to assure the market that worries on price pressures in the country due to rising food and oil costs "may not be well placed" with general inflation expectations for 2011 still well anchored.

Three straight weeks of fuel price hikes had helped stoke fears that inflation would surge this year.

Analysts had also been warning that upward inflationary pressures could affect economic growth.

Some even suggested that this was the reason behind a sell off in Philippine securities this month.

Overall inflation rate in 2010 hit 3.8%, well within the government's target range of between 2.5% and 4.5%.