Philippines’ easing inflation a ‘good reason’ to pause on rate hikes

THE Philippines’ inflation is seen easing to below 4 per cent before the end of the year, giving the central bank “a good reason” to continue pausing on raising rates, its governor said on Monday (Jun 19). “We’re driven largely by our own inflation target,” Bangko Sentral ng Pilipinas (BSP) governor Felipe Medalla, whose term expires on Jul 3, told reporters. “It’s a good reason to pause.” Monetary authorities will meet on Thursday to set key benchmark rates. The BSP kept its benchmark interest rate steady at 6.25 per cent at last month’s policy meeting, pausing after a series of rate hikes totalling 425 basis points beginning in May last year. Inflation has steadily eased from a 14-year peak in January. Annual headline inflation slowed for a fourth consecutive month in May to 6.1 per cent, bringing the January-May average to 7.5 per cent, still well outside the 2 per cent to 4 per cent target range of the central bank. REUTERS