Metro Manila (CNN Philippines, October 11) — The Bangko Sentral ng Pilipinas (BSP) has hinted at possibly raising borrowing rates next month to counter the faster pace of price increases in September.
“We are considering hikes, but we’re going where the data leads us,” BSP Governor Eli Remolona said during a briefing, adding that some of the upside risks to inflation have materialized.
This was his response when asked on Wednesday about the previous caution of National Economic and Development Authority Secretary Arsenio Balisacan against raising interest rates.
Balisacan said higher rates may dampen consumer demand, subsequently hurting the economy.
READ: Balisacan rejects idea of another rate hike after higher September inflation
Balisacan may be against “very aggressive hikes,” Remolona said.
The BSP chief said he would not rule out a 25-basis point rate increase.
“I wouldn’t say that we’re done with the tightening,” he said. “I would say, it’s a serious concern whether supply-side shocks would have a lasting impact. Normally, they don’t have a lasting impact, but once they get into expectations, once they get into wages, it becomes an issue for us.”
“Of course, we only control the demand side,” Remolona said. “And for now, we think tightening has relieved pressure from the demand side. So far, we think it hasn’t really affected our growth prospects. We’re watching that very, very carefully.”
For the fourth straight meeting, Monetary Board officials kept interest rates unchanged at 6.25%.
Monetary authorities will meet again on Nov. 16.
