Philippines Fm No Need For A Rate Hike

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Philippines Fm No Need For A Rate Hike

Philippines FM: No Need For A Rate Hike

According to the finance minister of the Philippines, there's no reason for the central bank to raise interest rates. The reason behind his statement is the easing of domestic inflation in the country.

This statement by Philippines FM is very important as the upcoming monetary policy meeting is scheduled for 18th May.

Just An Opinion, Not An Order!

According to the finance minister, his opinion on the rate hike is just an opinion. And if we look at the number of board members, the total is around 7! This means that the finance minister only has one vote at the upcoming meeting of the central bank.

The opinion of Diokno is that a pause in the rate hike is the best policy. And he cites the easing of inflation as the reason for this policy.

For the most part, the BSP believes that inflation will go below 4% by the end of the 4th quarter. As for pausing the rate hikes on 18th May, there is no consensus yet.

However, there are some economists who are forecasting that another rate hike is highly likely at the upcoming policy meeting. After that, the central bank of the Philippines might take a break.

At the same time, the International Monetary Fund (IMF) shares a different perspective on inflation in the Philippines. According to IMF, inflation is skewed towards the upside, and the only way to control it is through continued monetary tightening.

Recently, the governor of BSP also left comments about how the next year will be good for inflation and economic growth.

Since May 2022, the BSP has raised the interest rate by 425 bps in an attempt to fight inflation. According to experts, it is still too soon to see the full effects of interest rates on the Philippines's economy.

For now, there's no clear message or direction about the upcoming policy meeting in the Philippines. In other words, it will be a game of waiting until we get the official announcement.

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