Philippine central bank governor says rates to ‘stay sufficiently tight’

THE Philippines central bank’s policy would have to remain “sufficiently tight” with inflation currently forecast to stay above its 2 to 4 per cent target, making a rate cut at its next meeting unlikely, its governor said on Monday (Jan 22).

The central bank’s benchmark interest rate was kept steady at 6.5 per cent in the final two meetings of last year, after hiking rates by a total of 450 basis points since May 2022 to rein in inflation. Its next meeting is on Feb 15.

Headline inflation last month returned to target at 3.9 per cent, but average inflation for 2023 stood at 6 per cent, way above the central bank’s 2 to 4 per cent target.

Central bank governor Eli Remolona also said the economic slowdown in China “is a concern” and could hurt the Philippines’ growth prospects, saying it could be a “long slowdown”. REUTERS