BSP Eyes 25 Or 50 bps Rate Hike Come March

The Bangko Sentral ng Pilipinas (BSP) has flagged a 25 or 50 basis points rate hike at its next meeting, with inflation as the primary concern.

Photo Insert: The central bank raised its benchmark interest rate by 50 basis points on Feb. 16, Thursday, at its first rate-setting meeting this year, and said it was difficult to rule out needing a third or fourth increase.

“The choice is really between 25 or 50 (basis points) in the next meeting, unless we see an actual negative month-on-month inflation,” BSP) Governor Felipe M. Medalla said in televised interviews, carried by the Reuters wire agency.

The central bank is open to more hikes beyond 50 basis points if there is a need for it and depending on data, he said.

Inflation, running at a 14-year high of 8.7% in January, is the BSP’s primary concern, with interest rate hikes meant to increase the chances of a lower than 4.0% year-on-year inflation by the end of 2023, Medalla told Bloomberg TV and CNBC Asia TV.

The central bank raised its benchmark interest rate by 50 basis points on Feb. 16, Thursday, at its first rate-setting meeting this year, and said it was difficult to rule out needing a third or fourth increase.

Monetary authorities, which have raised rates eight times for a total of 400 basis points since last year, will next meet on March 23.

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