Philippine central bank raises key policy rate by 25 bps

MANILA  – The Monetary Board as expected raised the Bangko Sentral ng Pilipinas key policy rate by 0.25 percentage point (or 25 basis points) to 6.25 percent as inflation remained high in February

Asked whether this was the last hike in the current monetary policy tightening cycle, MB chair and BSP Governor Felipe Medalla said in a press briefing that the decision in upcoming meetings would depend on data that would come in.

“It would really depend on our assessment of the inflation picture in the Philippines,” Medalla said.

BSP Deputy Governor Francisco Dakila Jr. said the MB revised downward the forecast for average inflation in 2023 to 6 percent from 6.1 percent, and for 2024 to 2.9 percent from 3.1 percent. This was after the annual inflation slightly slowed to 8.6 percent in February.

The move, which was predicted by all but one of 24 economists in a Reuters poll, brought to 425 basis points the total hikes the central bank has delivered since May 2022.

The BSP reiterated it was prepared to act if needed to slow the pace of consumer price increases to within its 2 percent-4 percent comfort range.

-With a report from Reuters

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