Philippine rates to stay higher for longer to tame inflation, says BSP chief

MANILA – 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.

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.

READ: BSP keeps benchmark rate unchanged at 6.5%

The central bank kept its benchmark interest rate steady for a second straight meeting at 6.5 percent 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 percent in November from 4.9 percent in October and 6.1 percent in September.

READ: BSP target in sight as Nov inflation slows to 4.1%

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

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

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