A Fifth Straight Filipino Central Bank Interest Rate Hike

November 15, 2018

A desire to counter perceived upside inflation risks such as┬áthe rice tariffication bill, the suspension of the oil excise tax, wage pressures, and elevated inflation expectations justified a further hike of Bangko Sentral ng Pilipinas’ overnight reverse repo rate to 4.75% from 4.5%, according to a released central bank statement. Officials also felt obliged to respond to “the continued uncertainty in the external environment amid tighter global financial conditions and trade tensions among major economies,” which could have inflationary implications. That said, the statement reiterates the belief that inflation will settle into the 2-4% target in 2019 and 2020. Prior to today’s announced increase, the Monetary Board had raised the interest rate benchmark by 25 basis points in May and July and then by 50 bps each in August and September.

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



Comments are closed.