The Bangko Sentral ng Pilipinas (BSP) is prepared to implement another interest rate increase, according to Governor Eli Remolona Jr., who stated that the Philippine economy remains resilient enough to absorb further monetary tightening.
The central bank has already raised rates twice this year, totaling 50 basis points, but Remolona indicated that an additional 25-basis-point hike is within the realm of possibility if inflationary pressures persist.
This hawkish stance underscores the BSP’s commitment to anchoring inflation expectations despite the potential drag on economic growth.
The governor’s comments come as the BSP has forecast that annual consumer price inflation could reach as high as 7% in June, marking a significant acceleration from recent levels.
The central bank attributes this rise to various domestic and external factors, including volatile food prices and global energy costs.
With inflation trending upward, the BSP faces a delicate balancing act between curbing price increases and supporting economic activity.