The Philippine central bank will likely end its monetary tightening with one or two more rate increases this quarter that will bring the key rate to around 6%, according to its governor.
“The most likely scenario is that the last increase is the March meeting,” Bangko Sentral ng Pilipinas Governor Felipe Medalla said in an interview in his office Friday. Asked what he thinks of analysts predicting BSP’s peak rate at 6% from the current 5.5%, he said: “I think they’re most likely right.”
After delivering one of Asia’s largest rate increases in the past year, the Philippines is at the tail end of its most aggressive tightening in two decades as the global outlook darkens and a stronger peso cools 14-year high inflation.
BSP will likely continue raising at its Feb. 16 and March 23 meetings as “inflationary expectations are still high,” Medalla said. Unlike neighbors that used subsidies to fight price pressures, the Philippines leaned heavily on monetary policy, he said.
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