Philippine central bank signals pause in rate hikes in May

THE Philippines’ central bank could pause its interest rate-hiking cycle at its meeting next month due to easing inflation, its governor said on Wednesday (Apr 12).

“We are probably pausing in the next meeting because the inflation prints are very good,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said in a briefing in Washington aired live on Facebook.

Tempered inflation in April puts monetary authorities in a position to pause policy, Medalla said, adding that the inflation average for 2023 will be revised downwards from the 6 per cent projection.

The Philippine central bank next meets on May 18 to set benchmark interest rate, which it has raised by 425 basis points since last year to 6.25 per cent.

The BSP was Asia’s most aggressive central bank in raising interest rates to combat elevated inflation and keep up with the US Federal Reserve’s tightening cycle.

The Fed’s actions are still relevant but less of a factor in its decision making, Medalla said, adding that monetary policy is largely driven by inflation.

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Philippine central bank slows rate hike pace as tightening nears end

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Philippine annual inflation hit 7.6 per cent in March, its second consecutive month of easing, giving the BSP leeway to pause in its monetary tightening cycle. REUTERS