Filipino Central Bank Rate Hike

June 23, 2022

At the Central Bank of The Philippines, a policy interest rate hike of 25 basis points to 2.5% matched expectations and followed a similar increase done after May’s policy review. In 2020, the overnight borrowing rate had been halved from 4.0% to 2.0%. Filipino CPI inflation of 5.4% as of May exceeds the 2-4% target and also constitutes a 42-month high. Moreover, there are signs of some upward creep in inflation expectations, so today’s action is meant to counter the risk of largely food price pressure from spreading to other parts of the economy. Projected inflation this year and next were revised upward to 5.0% and 4.2%.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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