Jan. 5 – Consumer price in the Philippines has reached its peak after eight straight months, with inflation progressing in the last month of 2009 particularly in commodities such as oil and food costs. Since the Philippines depends mainly on its imports of oil, the 60% increase within a span of twelve months is not surprising.

However, the government’s stimulus plan of 330 billion pesos that concentrates on the interior front, providing job vacancies and cash handouts for households, helped to raise demand levels after it was hit by the worst recession since WWII, so prices increased since demand is recovering.

Experts, however, show pessimism about the Philippines’ economic recovery which appeared to be slow, and it is anticipated to retain this pacing until the third quarter of this year. The inflation rates have placed some pressure on the central bank to start raising interest rates from its low records in order to control inflationary pressures. However, consumers will be relieved to know that interest rates will be the last thing to change this year, according to Diwa Guinigundoi the central bank deputy governor. The central bank is also keeping watch of the increasing interest rates in order to control the accelerating inflation especially with energy and food prices continue to rise.

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