Philippine Finance Secretary Benjamin Diokno attends an economic briefing following President Ferdinand Marcos Jr’s first State of the Nation Address, in Pasay City, Metro Manila, Philippines, July 26, 2022. REUTERS/Lisa Marie David/File photo
MANILA – Philippine Finance Secretary Benjamin Diokno said on Monday the central bank could decide to either hike the key interest rate by 25 basis points (bps) or keep policy settings unchanged at its next meeting on Thursday amid uncertainties.
Diokno, who also sits in the central bank’s policy-making monetary board, expressed optimism that inflation will ease to around 4 percent toward end of the third quarter.
“The option now is not to hike or to hike by 25 bps,” Diokno told a forum organized by foreign correspondents.
Philippine annual inflation eased slightly to 8.6 percent in February from 8.7 percent in January, slowing for the first time in six months on lower transport and food prices, but remains well outside the 2 percent-4 percent target band for the year.
The Bangko Sentral ng Pilipinas has raised rates eight times for a total of 400 basis points since last year to curb inflation, bringing the overnight reverse repurchase facility rate to 6 percent, the highest since 2007.
Diokno, meanwhile, said he would not be surprised if the central bank cut banks’ reserve requirement ratio to a single-digit level from the current 12 percent before year end.
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