The Bangko Sentral ng Pilipinas (BSP) said that although the scope for keeping policy rates has narrowed due to continued climb of the inflation rate, there is still no need to hike rates. This as the government reported the rise in the inflation rate to 4.3 percent last February from month-ago’s 3.5 percent on account of faster inflation rate in food and oil commodities. BSP Governor Amando Tetangco Jr., in a text message to reporters Friday, said the jump in the rate of price increases “supports our view that the scope for keeping rates steady has narrowed.”
He explained that monetary officials will include this new information to their forecast runs “to see how much it moves the inflation path.” He also said this development would be considered whether this “would lead to average inflation forecasts that would risk breaching the target for the policy horizon.” “It is important to remember that the BSP looks at expected price movements over a longer policy horizon, and not simply on contemporaneous inflation,” he added. To date, central bank’s overnight borrowing rate is at record-low of four percent while the overnight lendingrate is at six percent, both of which were steady after being slashed with a total of 200 basis points from December 2008 to July 2009 to address possible impact from the recent global financial crisis.
REACTION:
Actually, we can’t change the fact that inflation is happening in our world today. As our economic teacher, Mr. James Daigdigan has stated, “when there is inflation, the employment or job opportunities increases.” So it clearly stated that when there is deflation, there are less job opportunities. It is normal when inflation occurs but the sudden rise of the oil is unacceptable. Yes, the government did say that the war in Libya made it hard to produce oil, but it is not Libya who is the main source of our oil or petroleum but the Middle East. the sudden rise of the oil doesn’t speak the truth about what had happened to Libya. I might say that our government has a bit of corruption in that situation. If not so, why the sudden increase of commodities?
The Essay on Analyzing Relationship Between Inflation Rate And Per Capita GDP Growth
There have been different theories for explaining crucial relationship between inflation and per capita GDP growth. In this paper we will consider the neoclassical model and wage equation. This approach is very useful in terms of flexibility to understand underlying assumptions behind the theory. Along with this, this model does include the adjustments in real wages, which is very important while ...
Resources are scarce as we all know that is why inflation is normal. the less resources that we have, the higher the price will increased. Due to labor and demand why there is also inflation.
