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Philippine inflation seen moving closer to 7% in September: poll

[MANILA] Philippine annual inflation rate likely continued to climb in September, keeping the pressure on the central bank to raise interest rates further to prevent consumer prices from spiralling out of control.

The consumer price index in September was seen to have risen by 6.8 per cent, a Reuters poll of 12 economists showed, faster than the 6.4 per cent increase reported in August, due to rising global oil prices and crop losses after the region was hit by a super typhoon. Their forecasts ranged from 6.3 to 7.0 per cent.

The projection, which is in line with the central bank's estimate, would be the highest since February 2009. The central bank gave a forecast range of 6.3 per cent and 7.1 per cent for September and said the rate could settle around 6.8 per cent.

At its policy meeting last month, the central bank maintained that inflation would peak in September and slowly ease back to within its 2-4 per cent target next year, due to a combination of monetary and non-monetary measures including removing non-tariff barriers to certain agricultural imports.

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The central bank raised its benchmark rates for the fourth time in five months on Thursday, pushing them to seven-year highs of 4.5 per cent, and kept the door open for further tightening as it battles to cool inflation.

Some economists believe the central bank would deliver at least one more rate hike before the end of the year.

The Bangko Sentral ng Pilipinas, which has two more meetings left this year, has raised the rate on its overnight reverse repurchase facility by a total 150 basis points since May.

REUTERS