The Central Bank of the Philippines has not ruled out raising interest rates, despite GDP growth of only 2.3%, the lowest in ASEAN. The BSP has already raised interest rates by a total of 0.50% this year ahead of its next policy meeting on August 27.
On August 10, 2569, at 12.54:XNUMX a.m., Bloomberg News reported that The Central Bank of the Philippines (BSP) is also prepared to raise interest rates further if necessary. In order to bring inflation back into line with the target, even though the Philippine economy slowed more than expected in the latest quarter, which partially reduced the pressure to tighten monetary policy.
Eli Remolona, Governor of the Central Bank of the Philippines He told reporters on Monday that The key question is how much policy action the BSP needs to take to bring inflation back down, with the statement indicating that the central bank is prepared to tighten policy as necessary to bring inflation back into the target range.
The statement reflects that the BSP has not yet ended its interest rate hike cycle, even though the Philippine economy expanded by only 2.3% in the latest quarter, which is considered a significant slowdown and lower than expected.
This year, the BSP has already raised interest rates by a total of 0.50 basis points, or 50 basis points, and its next monetary policy meeting is scheduled for August 27.
Remolona specify that The central bank's primary mission is to maintain price stability, while supporting sustainable economic growth is part of that goal.
However, he acknowledged that the economy is facing growth challenges in the short term, and when asked whether the disappointing GDP figures would lessen the pressure on the BSP to raise interest rates, Remolona replied, "Yes."
Although inflation in the Philippines slowed for the third consecutive month in July, it remains above the central bank's 3% target for the year.
side Zeno Abenoja, Deputy Governor of the BSP. It is stated separately that... Core inflation, which excludes certain food and energy items, may be starting to stabilize.
The Philippines also has the lowest economic growth rate among Southeast Asian countries that have reported their Q2 GDP figures.
The country's economy is under pressure from high inflation linked to the Iran war, which has severely impacted household consumption. At the same time, investment has weakened due to corruption related to flood prevention infrastructure projects.
Therefore, while the economic slowdown gives the BSP more reason to delay interest rate hikes, inflation remaining above the target keeps the central bank open to further tightening policy at its next meeting.
refer : www.bloomberg.com
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