Philippines: BSP says in ‘firm’ control as prices spike

  • The Bangko Sentral ng Pilipinas (BSP) continues to have a firm hand on inflation, its chief said amid mounting calls for a more aggressive rate hike in Aug 18.
  • BSP Governor Nestor A. Espenilla, Jr. said monetary authorities have delivered “measured” responses to surging consumer prices through two successive interest rate hikes, coupled with the weekly term deposit auctions, contrary to criticisms that the central bank has been behind the curve in doing so.
  • Mr. Espenilla said the BSP continues to have “firm monetary control” despite fast-rising inflation, which hit a fresh five-year peak of 5.2% in Jun 18, beyond the central bank’s target.
  • The Monetary Board tightened rates through two 25 basis point (bp) increases in its May 18 and Jun 18 meetings, bringing benchmark rates to 3-4%.
  • Mr. Espenilla made his latest statement as more economists are seeing another rate hike from the Monetary Board’s 9 Aug 18 meeting. Despite inflation concerns, Mr. Espenilla said the Philippine economy continues to be robust despite concerns both abroad and at home.

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