Finance Secretary Benjamin Diokno said he expected the Bangko Sentral ng Pilipinas to take a "long pause" in raising interest rates as inflation is expected to ebb.
"Our expectation is inflation could hit below 2% by the first quarter of next year because of the high base effect. That would be the time to consider cuts," DOF Secretary Benjamin Diokno said. File photo
Finance Secretary Benjamin Diokno said he expected the Bangko Sentral ng Pilipinas to take a "long pause" in raising interest rates as inflation is expected to ebb."I think we will continue to maintain," Diokno told reporters on Friday. "It will be a long pause. I don't see any cut until we really have that strong evidence of a decline" in inflation, Diokno said.
He is one of the seven members of the policy-making Monetary Board, which next meets on Aug. 17 to review policy under the leadership of a new central bank governor., replacing Felipe Medalla, who oversaw the central bank's most aggressive tightening in years. Since May last year, the central bank raised rates 425 basis points to combat inflation. It has slowed for four months to 6.1% in May but remains above the bank's 2%-4% target.
A strong majority in a Reuters poll forecast the bank would stay on hold for the rest of the year, though a few saw a rate cut as soon as year-end. "Our expectation is inflation could hit below 2% by the first quarter of next year because of the high base effect. That would be the time to consider cuts," Diokno said.
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