Bangko Sentral ng Pilipinas Governor Felipe Medalla hinted at a continued pause on policy rate hikes this week, saying that the downtrend on inflation across the Philippines could justify this. | RonWDomingoINQ /PDI
The BSP chief reiterated that the monthly readout should be less than 4 percent before the end of this year, and that inflation should be more or less 3 percent by next year.
“Now of course we know from experience that something can happen that makes the actual inflation lower or higher,” Medalla said. Private-sector analysts—including those at ING Bank, Goldman Sachs, Rizal Commercial Banking Corp., Security Bank Corp. and Pantheon Macroeconomics—are also expecting the BSP’s Monetary Board to keep the policy rate unchanged this week.
State economic managers have also reiterated that while inflation had eased for the fourth straight month in May, El Niño remained a major concern that the government is addressing.In the Philippines, the climate phenomenon increases the chance of lower than normal rainfall conditions, which could lead to dry spells and droughts in some areas of the country.
El Niño is expected to develop in the next couple of months, with a higher chance of persisting up to the first quarter of 2024.Subscribe to our daily newsletter
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