ANZ Research has issued a warning that the Bangko Sentral ng Pilipinas’ (BSP) ongoing campaign to curb inflation through higher interest rates is likely to impose further costs on the country’s economic growth.
The bank’s analysts suggest that the monetary tightening required to bring price stability back within target ranges may dampen domestic demand and slow the expansion trajectory in the near term.
The assessment highlights the difficult balancing act facing policymakers in emerging markets where inflation remains persistent.
While the BSP’s primary mandate is to maintain price stability, the side effect of higher borrowing costs is a potential drag on investment and consumer spending.
ANZ’s commentary underscores the risk that aggressive monetary policy could outpace the economy’s ability to absorb the shock without significant growth deceleration.
This development aligns with a broader regional pattern of central banks maintaining restrictive stances.