The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, may raise the policy interest rate by 25 basis points in its November meeting, Governor Eli Remolona said Wednesday.
“I will not rule out [a 25-bps hike],” Remolona said in a press chat at the BSP headquarters in Manila.
“We are looking at the numbers—twice, three times…We are worried about transport fare hikes… And I would not say we are done with tightening. We are watching carefully,” Remolona said.
The BSP raised interest rates by a total of 425 basis points to 6.25 percent to rein in inflation before pausing in the last four meetings.
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan earlier expressed worries over a further hike in interest rates because it might hurt economic growth.
Inflation peaked at 8.7 percent in January 2023 before easing in the next six months. But inflation in August picked up again to 5.3 percent and further to 6.1 percent in September.
This brought the average in the first nine months to 6.6 percent, above the 2023 target range of 2 percent to 4 percent.
Balisacan said further raising interest rates would have long-term effects in the succeeding 12 months.
Remolona considered the spike in September headline inflation to 6.1 percent from 5.3 percent in August a “significant” increase, although the core number looked “encouraging.”
“The headline [inflation] could affect expectations… then we have to worry,” Remolona said.
Finance Secretary Benjamin Diokno said earlier he remained confident monetary authorities would consider all the latest relevant information before deciding on policy stance in the next meetings.
Diokno said in a briefing these information include the gross domestic product, inflation and labor market conditions.
Remolona also said in previous interviews that a rate hike in November 2023 might not be the last one in its tightening cycle, given the persistent elevated inflation.
“We are not convinced it will be the last one in the cycle… We are still on a hawkish stance,” Remolona said in an interview on Bloomberg TV.
