Philippines central bank ready to adjust policy settings amid resilient economy

MANILA  – The Philippines central bank has policy flexibility given a resilient economy and stands ready to adjust interest rates to bring inflation back to target, its governor said on Thursday.

The Southeast Asian nation’s sound economy provided the central bank flexibility “to maneuver as it acts to bring inflation back to the target,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said in a statement ahead of a Dec. 15 rate setting meeting.

Medalla told Reuters last month the BSP would have to raise rates in step with the U.S. Federal Reserve, whose Chair Jerome Powell on Thursday said it could scale back the pace of its rate hikes “as soon as December”.

“The BSP (Bangko Sentral ng Pilipinas) stands ready to adjust its monetary policy settings,” it said.

The Philippine economy grew by a stronger-than-expected 7.6 percent in the third quarter, backed by consumer spending.

The BSP, which has increased its benchmark interest rates by a cumulative 300 basis points since May to battle inflation, could hit pause on rate hikes by the first quarter next year barring “no major shocks”, its governor said on Tuesday.