The Business Times
Asean Business logo
SPONSORED BYUOB logo

Philippine central bank head open to more rate hikes in 2022

Published Wed, Sep 7, 2022 · 05:43 PM

PHILIPPINE central bank Governor Felipe Medalla signalled readiness for as many as three more quarter-point increases to interest rates, depending on the pace of the Federal Reserve’s monetary tightening.

In a scenario where the Fed increases rates by 75 basis points and delivers one more hike after that, Bangko Sentral ng Pilipinas will probably be doing not more than three 25 basis-point adjustments, Medalla said on Wednesday (Sep 7). 

“We cannot not react,” the governor said in a doorstop interview with Bloomberg on the sidelines of the Philippine economic briefing in Singapore. “But we will not match it.” 

Last month, Medalla said the BSP was more likely to deliver one or two 25-basis point increase in rates for the rest of the year.

The central bank, which has raised rates by 175 basis points in four moves so far this year, is trying to tame above-target inflation and also support the peso, which has lost more than 10 per cent this year to become the third-worst performer in Asia.

The currency’s fall was mainly due to widening current account deficit amid more costly imports, Medalla said at the live-streamed economic briefing.

A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business

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

The peso hit multiple record lows this week, adding to cost pressure in a nation that imports goods from oil to rice. BSP’s monetary policy has “much room” to curb inflation, the governor said. 

Inflation in the Philippines may peak this month, before decelerating closer to the mid-point of a 2 per cent-4 per cent target band in the middle of next year, Medalla said in the interview. While price-growth eased in August, it still remains well above the BSP’s goal. BLOOMBERG

KEYWORDS IN THIS ARTICLE

READ MORE

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