BSP Still Undecided On Rate Hike

The Bangko Sentral ng Pilipinas (BSP) has indicated that it is not considering an interest rate cut at this time, despite a deceleration in the inflation rate.

BSP Governor Eli Remolona Jr. stated that it is too early to discuss reducing key interest rates as inflation has not yet firmly fallen within the target range, and risks persist. I Photo: Bangko Sentral. ng Pilipinas Facebook

BSP Governor Eli Remolona Jr. stated that it is too early to discuss reducing key interest rates as inflation has not yet firmly fallen within the target range, and risks persist.

While analysts have suggested the possibility of easing interest rates due to favorable inflation numbers, Remolona emphasized the need for a thorough assessment of the situation.

He stated, "The risks are still there, so we have to assess the situation, so I think it's premature to say we will start to ease."

The BSP aims to ensure that inflation remains comfortably within the target range before considering any policy adjustments. Remolona highlighted the strength and robustness of the economy, expressing satisfaction with its current state.

He emphasized the BSP's cautious approach, stating, "We don't want to make unnecessary tightening; we want to make just enough tightening so that we get within the target range, and expectations remain anchored to our target."

Consumer price growth in November slowed for the second consecutive month, reaching a 20-month low of 4.1%, just below the central bank's target range of 2.0% to 4.0%. Despite easing inflation, the BSP remains vigilant and is prioritizing stability and adherence to its inflation target before considering any policy adjustments.

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