Metro Manila (CNN Philippines, April 13) — The Bangko Sentral ng Pilipinas (BSP) has signaled a pause in the interest rate-hiking cycle at its next policy meeting in May due to a “very good” inflation print.
“We are probably pausing in the next meeting because the inflation prints are very good,” said BSP Govenor Felipe Medalla during the Philippine Economic Briefing in Washington, D.C. on Wednesday.
Inflation likely moderated in April from 7.6% in March when the reading posted its second consecutive month of easing, giving the policymaking Monetary Board (MB) some leeway to pause from monetary tightening.
“Inflation has already fallen to the lower end of the BSP forecast for the month… but even more telling is what’s happening to the change in the prices from one month to the next,” said Medalla.
Medalla said it puts monetary authorities in a position to recast downwards their average inflation forecast for 2023 from the 6% projection they last tipped during the previous MB meeting.
The BSP has so far raised interest rates by a total 425 basis points since last year to 6.25% now, from just 2% at the start of 2022.
Medalla said the US Federal Reserve’s actions remain a factor, but not a major driving force that will dictate where Philippine borrowing costs will go.
