Diokno: Philippines has ‘done enough’ policy tightening

October 9, 2023 - 11:00 AM
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Philippine Finance Secretary Benjamin Diokno in Pasay City, Metro Manila, Philippines, July 26, 2022. (Reuters/Lisa Marie David/File Photo)

 Philippine Finance Secretary Benjamin Diokno believes the central bank has “done enough” policy tightening to tame inflation, but reiterated future interest rate moves would remain data dependent.

Diokno’s remarks echoed that of the country’s economic planning minister, who on Friday said further rate hikes may be unnecessary because inflationary pressures in the Philippines were being driven by supply-side factors.

The annual inflation rate quickened for a second month in September to 6.1%, bringing the year-to-date average rate to 6.6%, far from the central bank’s 2%-4% target for the year.

Diokno also noted there has been some moderation in underlying price pressures, as core inflation, which excludes volatile food and energy prices, slowed to 5.9% in September from 6.1% the previous month.

“We have done enough,” said Diokno, who is a member of the central bank’s seven-member policy making monetary board, during a news conference on Friday for release on Monday. “Core inflation has gone down.”

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The Bangko Sentral ng Pilipinas has kept its benchmark interest rate PHCBIR=ECI steady at 6.25% at its last four meetings, and said on Friday it was ready to resume tightening as needed.

It next meets on Nov. 16 to review policy, after the Philippines releases its third quarter growth data on Nov. 9.

Some economists said September inflation, which was above market expectations, could prompt the central bank to resume hiking rates next month.

Diokno said growth in the second half of the year would likely be faster than the first half’s 5.3% expansion, supported by the anticipated pick up in infrastructure spending in the last quarter. Manila has a 6.0-7.0% growth target for 2023.

– Reporting by Karen Lema; Editing by Christian Schmollinger