The Business Times
Asean Business logo
SPONSORED BYUOB logo

Philippine central bank governor sticks to 75 bps rate hike plan

Published Fri, Nov 11, 2022 · 07:09 PM

PHILIPPINES central bank governor Felipe Medalla repeated on Friday (Nov 11) he will vote to raise interest rates by 75 points at the monetary authority’s Nov 17 meeting.

Medalla, who heads the seven-member policy making monetary board, told reporters it was necessary for rates to rise by that magnitude to bring inflation back to target next year.

A rate increase would also help stem the peso’s decline against the US dollar as it will prevent interest rate differentials between the United States and the Philippines from narrowing significantly, Medalla said in a recorded speech.

“Keeping a comfortable differential between our policy rates and that of the US lends support to the peso,” Medalla said, adding the central bank was prepared to intervene in the foreign exchange market to smooth volatility.

The Bangko Sentral ng Pilipinas’ (BSP) Nov 17 meeting comes after data on Thursday showed the Philippine economy grew 7.6 per cent in the third quarter on an annual basis, and 2.9 per cent on a quarterly basis, beating estimates, as domestic demand held up despite soaring inflation.

Annual inflation surged to a near 14-high rate of 7.7 per cent in October, bringing the 10-month average rate to 5.4 per cent, well outside the central bank’s full-year target of 2.0 per cent-4.0 per cent this year.

A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business

Business insights centering on South-east Asia's fast-growing economies.

“The BSP is committed to bringing inflation back to within target range over the medium term,” Medalla said. REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Asean

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here