Philippines’ easing inflation a ‘good reason’ to pause on rate hikes

June 19, 2023 - 4:10 PM
Bangko Sentral logo facade
The Bangko Sentral ng Pilipinas main building in Manila. REUTERS/Romeo Ranoco/File Photo

 The Philippines’ inflation is seen easing to below 4% before the end of the year, giving the central bank “a good reason” to continue pausing on raising rates, its governor said on Monday.

“We’re driven largely by our own inflation target,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla, whose term expires on July 3, told reporters.

“It’s a good reason to pause.”

Monetary authorities will meet on Thursday to set key benchmark rates.

The BSP kept its benchmark interest rate PHCBIR=ECI steady at 6.25% at last month’s policy meeting, pausing after a series of rate hikes totaling 425 basis points beginning in May last year. Inflation has steadily eased from a 14-year peak in January.

Annual headline inflation slowed for a fourth consecutive month in May to 6.1%, bringing the January-May average to 7.5%, still well outside the 2% to 4% target range of the central bank.

RELATED: Philippine inflation eases for fourth straight month in May

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