Rate Hike in the Philippines

August 18, 2022

The Filipino policy interest rate was increased by another 50 basis points to 3.75%. May had seen the first increase since November 2018, a hike of 25 basis points. Another 25-bp hike was agreed at the June central bank monetary board meeting, followed by a 75-basis point increase in July. The total increase of 175 basis points since May reverses almost all of the 200 basis points of reduction done in five steps during 2020. “The Monetary Board deemed further monetary action to be necessary to anchor inflation expectations and avoid a further breach in the inflation target over the policy horizon.” Officials project inflation this year to average almost twice the mid-point of their 2-4% target, and the 6.4% on-year rise of consumer prices in July was the most since late 2018.

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

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