• Private sector’s inflation forecasts exceed the central bank’s estimates for next year and the year after, he says, adding that BSP is “a lot more concerned about the exchange rate now than normal”
• Combination of supply shocks and weak currency make it harder to achieve a 2%-4% inflation target
• Currently, Medalla says a difference of less than 100 basis points between the Philippine and US policy rates could result in the peso being “too weak”
• “It’s not possible that we have no response to a Fed increase,” he says
• Matching a Fed hike would depend on how markets react to rate differentials and how confident BSP is about inflation being within target, possibly closer to the goal’s mid-point by 2H 2023