Philippine rates to stay higher for longer to tame inflation: central bank chief

PHILIPPINE interest rates will need to stay “higher for longer” as the economy is still battling high inflation, the central bank governor said on Wednesday (Dec 20).

The central bank is unlikely to cut rates in the next few months, Bangko Sentral ng Pilipinas governor Eli Remolona told a media conference, reiterating the lender’s hawkish stance.

The central bank kept its benchmark interest rate steady for a second straight meeting at 6.5 per cent on Dec 14, and said policy would have to stay “sufficiently tight” to bring inflation back to target.

Inflation eased for a second straight month to 4.1 per cent in November from 4.9 per cent in October and 6.1 per cent in September.

That brought the average rate over the 11-month period to 6.2 per cent, which was still well outside the central bank’s 2 to 4 per cent target for this year and next.

For 2024, inflation would be closer to 4 per cent than to 3 per cent, Remolona said.

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On Tuesday, the government announced it was reactivating its task force El Nino to come up with measures to cushion the impact of dry spell on the economy, which was now forecast to grow 6.5 to 7.5 per cent next year from 6.5 to 8 per cent previously. REUTERS