BSP governor says rates to ‘stay sufficiently tight’

January 23, 2024 - 1:00 PM
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BSP building
Facade of the Bangko Sentral ng Pilipinas in Manila. (BSP/Released)

 The Philippines central bank’s policy would have to remain “sufficiently tight” with inflation currently forecast to stay above its 2% to 4% target, making a rate cut at its next meeting unlikely, its governor said on Monday.

The central bank’s benchmark interest rate was kept steady at 6.5% in the final two meetings of last year, after hiking rates by a total of 450 basis points since May 2022 to rein in inflation. Its next meeting is on Feb 15.

Headline inflation last month returned to target at 3.9%, but average inflation for 2023 stood at 6.0%, way above the central bank’s 2% to 4% target.

Central bank Governor Eli Remolona also said the economic slowdown in China “is a concern” and could hurt the Philippines’ growth prospects, saying it could be a “long slowdown”.

— Reporting by Karen Lema; Editing by Martin Petty