|
HONG Kong and Shanghai Bangking Corp. (HSBC) said the Bangko Sentral
ng Pilipinas (BSP) had it all wrong about when inflation would peak.
In a briefing, Arnulfo Veloso, HSBC Philippines
treasurer, said inflation would plateau at 12 percent and end this
year at the high single-digit level.
“Inflation in August is already a plateau and
it is expected to peak before October,” he said. The BSP earlier
said inflation would peak next month and stay in the double-digit
territory until the first quarter next year.
Inflation accelerated to 12.5 percent last month
from 12.2 percent in July.
“Inflation can ease but still at high
single-digit levels,” Veloso said.
He said core inflation is expected to stay at
the 7 percent level this year, bringing the headline figure to 9
percent on declining oil and commodity prices.
The BSP projects inflation this year to average
between 9 percent and 11 percent.
Veloso said the BSP will raise its interest
rates by another 50 basis points for the rest of the year to manage
inflation expectations.
The central bank’s policy rates have increased
by 100 basis points or 1 percent so far this year, with the Monetary
Board raising its rates during the last three meetings. At present,
the BSP’s overnight borrowing and lending rates stand at 6 percent
and 6.75, respectively.
Veloso said the peso’s dollar value is
dictated by a basket of industrialized economies’ currencies,
including the Euro, Japanese Yen, British pound, Canadian dollar,
Swedish Krona, and Swiss Franc.
Declining world oil prices had strengthened the
US dollar, which in turn pulled down Asian currencies.
Mark Watkinson, HSBC Philippines chief
executive, said a long-term economic growth rate of 5 percent to 6
percent is an opportunity for investments.
“I remain optimistic in the Philippines’
growth performing in a very difficult time,” he said, referring to
present environment of a global slowdown amid high inflation.
He said the main driver for Asia’s growth is
domestic consumption, which is primarily supported by strong
remittances. In contrast, the region’s exports have been declining
since the US sub prime mortgage crisis began.
HSBC has 24 branches nationwide, with about 21
of them in Metro Manila. Besides banking services, HSBC also is
expanding its business process outsourcing business in the country.
-- Maricel E. Burgonio
|
