How’s inflation today? Pretty good, part 1By Randell Tiongson on July 8th, 2009
Philippine inflation is better that what the market expected and is withing the forecast of the BSP. It looks like the BSP guys are doing something good. In fact, June inflation registered at it’s lowest in 22 years with the CPI (Consumer Price Index) registering at only 1.5%. The BSP forecasted a range of 1.1% to 2.1%. Inflation last May was at 3.3% and mid year average inflation is about 5%, well within the BSP’s annual target. The reduction on the CPI was largely due to the fall of oil and commodity prices. Last time we had an inflation rate like this was in April of 1987, if I’m not mistaken. The BSP is targetting a range of 2.5 to 4.5% for 2009 so our report card is looking good, if inflation is the basis. BSP’s policy of keeping interests low is paying off , at least in the area of controlling inflation.
How does this affect us? Well, we can all appreciate the respite from increasing prices of goods and services. Inflation for the last 2 years has been bad and last year was worse with the increase in oil. On the downside, consumers might be lax in their budgets once more. People became budget conscious when prices were rising coupled by the world-wide financial crisis which I thought was a good thing, at least on the budgetting side.
Let’s see.. we are experiencing economic growth and inflation is low — that should be good. The issue is how the benefits can trickle down to the whole population… but I’ll leave that to the policymakers to debate about.
Now, on a personal finance point of view… this is really good for us if we know how we can take better advantage of it. Catch my next blogs as I try to discuss more about this…. but let me leave you with a great tip: “Ants are creatures of little strength, yet they store up their food in the summer (Proverbs 30:25)” . Times like these? Be an ant.