Bangko Sentral ng Pilipinas

May 10, 2018

Among today’s many central bank reviews of monetary policy, the one in The Philippines proved to be the meeting that resulted in an actual change in policy rates, as the overnight reverse repo, the overnight lending, and the overnight deposit rates were raised by 25 basis to 3.25%, 3.75%, and 2.75%. A new forecast unveiled in a released statement foresees more broadly based inflation. Such could exceed the 3-5% target this year because of supply-side pressures but should settle back into the target boundaries next year. Oil market uncertainties are one of the factors why inflation risks are considered to be skewed toward the upside.  Today’s rate hike is meant to “arrest potential second-round effects by tempering the buildup in inflation expectations,” and it may not be the last tightening, either. The statement concludes, “the BSP stands ready to undertake further policy action as necessary to ensure the achievement of its price and financial stability objectives.”

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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