BSP chief vows to do what’s necessary to meet inflation target

September 22, 2022 - 12:49 PM
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Bangko Sentral ng Pilipinas headquarters in Manila. The central bank’s first quarter Consumer Expectations Survey (CES) for 2018 showed an index of 1.7 percent, down from the previous quarter’s 9.5 percent and year-ago’s 8.7 percent. (Reuters file photo)

 The governor of the Philippine central bank said on Thursday the country’s monetary authorities remain focused on bringing inflation back within target, in remarks ahead of its decision on interest rates later in the day.

“Of course, we will do what is necessary to achieve a target consistent inflation path,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla also said in a recorded message at a business forum, adding that current policy settings remain accommodative.

The BSP is expected to raise interest rates further on Thursday by 50 basis points to support a weakening currency and blunt its effect on imported inflation, based on Reuters poll of economists.

The BSP’s policy action comes after the U.S. Federal Reserve’s hefty rate hike of 75 basis announced hours earlier, with Fed Chair Jerome Powell signaling that borrowing costs would keep rising this year.

The Philippine peso PHP= sank to a record low and other Asian currencies fell against the greenback on Wednesday ahead of the Fed announcement.

RELATED: Asian FX weaken as Fed rate hike looms, Philippine peso hits record low

Philippine inflation averaged 4.9% in January-August, above the 2% to 4% target band for the year.

—Reporting by Neil Jerome Morales; Writing by Enrico dela Cruz; Editing by Martin Petty