The Philippines: Diokno sees rate rise to 2.5%-2.75% as reasonable

  • PHILIPPINE CENTRAL BANK Governor Benjamin E. Diokno said raising the key policy rate to between 2.5% and 2.75% as part of an exit from pandemic-era accommodation would be “reasonable and consistent” with the nation’s economic growth and inflation targets.
  • “We plan to start the normalization process in 2H22,” Mr. Diokno said, when asked about the plan for rate hikes.
  • “It is not date specific, but we will continue to be data dependent,” he said, adding that a 2.75% key policy rate “might be reached by 2023.”
  • Mr. Diokno on 26 Mar 22 said a rate increase isn’t the appropriate tool to address supply-driven price pressures, and suggested non-monetary moves to the government.
  • BSP has kept interest rates on hold since Nov 20, and is scheduled to set the benchmark rate next on 19 May 22.

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