Citi Philippines CEO Paul Favila
MANILA – The Philippines’ central bank is expected to initiate a reduction in its policy rates in the coming year, taking into account the risks posed by the El Niño phenomenon and the potential impact of the planned legislated wage increase, said Citigroup’s local unit, Citi Philippines.
Citi Philippines CEO and country head Paul Favila stated on Monday that the Bangko Sentral ng Pilipinas (BSP) will likely exercise caution and carefully assess these risks when formulating its monetary policy for the remaining year.
Headline inflation
“If we observe that headline inflation remains within a specific range, then the central bank may start considering lowering interest rates,” said Favila during a media forum organized by the company. “The central bank will attempt to lower interest rates as soon as conditions allow, but I don’t expect this to happen in the near future. Probably early next year,” he added.
Last June 22, the Monetary Board (MB) of the BSP – its seven-person policy-making body – maintained its key policy rate at 6.25 percent, stating that the latest baseline projections suggest a gradual decrease in inflation towards the target range of 2 percent to 4 percent over the next two years.
READ: BSP keeps key rate unchanged at 6.25%
Policy meeting
This was the second consecutive policy meeting in which the central bank’s overnight borrowing rate remained unchanged after a total increase of 4.25 percentage points over the past 13 months, starting from a historic low of 2 percent.
Inflation in the Philippines has decreased for five consecutive months to 5.4 percent in June, down from 8.7 percent in January. The average inflation rate in the first half of the year was 7.2 percent.
READ: BSP keeps key rate unchanged at 6.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
Denial of responsibility! Samachar Central is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
