Philippines: Monetary board member says BSP ready to pause tightening

  • THE BANGKO SENTRAL ng Pilipinas (BSP) may pause its tightening moves should month-on-month inflation show deceleration, a member of the policy-making Monetary Board said, noting that the impending removal of rice import quotas should help prod overall price increases back to target in 2019.
  • Monetary Board Member Felipe M. Medalla said the central bank may “take a pause” should the pace of price increases soften starting from Oct 18. But he did not discount the possibility that commodity prices could still pick up faster.
  • Mr. Medalla said monetary authorities are watching m/m inflation as it shows the “momentum” of price movements. He explained that a month-on-month pace of 0.3% or less would be more in line with the original target, but noted that eight of the past nine months have clocked in a faster pace.
  • Sep 18’s m/m seasonally adjusted pace clocked in at 0.8%, coming from 0.9% in Aug 18. The Monetary Board member noted that there may be a chance that inflation could still log faster in Oct 18, versus the central bank’s expectation that the prices may have already peaked in Sep 18.
  • Still, he said that Oct 18 or even Nov 18 inflation could match Sep 18’s pace.

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