Financial News: Philippines Unlikely To Tighten Policy Further, Central Ba

Philippines Unlikely To Tighten Policy Further, Central Bank Chief Says

03/06/2024 - 10:18:00 (RTTNews)

(RTTNews) - The Philippines' central bank Governor Eli Remolona said on Wednesday that as inflation is expected to fall within the government's target this year, the central bank is unlikely to return to a tightening cycle.

"I think it's unlikely that we will tighten some more. But we'll see what the data says," Bangko Sentral ng Pilipinas Governor Eli Remolona said at a press conference.

Remolona also told reporters that the central bank could not say yet that it could cut interest rates soon, given upside risks to inflation like higher rice prices.

According to official data released recently, the headline inflation rate in the Philippines rose from 2.8 percent in January to 3.4 percent in February.

This is within the BSP forecast range of 2.8-3.6 percent for the month.

As a result, the year-to-date average of 3.1 percent meets the government's inflation target of 3.0 percent +1.0 percentage point.

The latest inflation outturn is consistent with the BSP expectations that inflation will likely remain within the target range in the first quarter, the BSP said Wednesday.

Inflation could temporarily accelerate slightly above the target range from the second quarter due to the adverse impact of El Nino weather conditions on agricultural production and positive base effects, the central bank added.

Going forward, the BSP said it will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy.

For the third time in a row, the BSP's Monetary Board decided to maintain key policy rates as it downgraded its inflation outlook for 2024 at its February policy meeting.

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