‘An off-cycle rate hike is on the table at the moment; if the data says inflation will go up very significantly and if there’s a risk affecting expectations, then we may go with an off-cycle hike as early as Thursday this week’
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. on Tuesday said depending on its analyses of recent economic and market data, the central bank's Monetary Board might announce an off-cycle policy rate hike this Thursday, 26 October.
"Right now, I'm going to a meeting where we'll look at the data. I'll know the data in the next hours," Remolona told media covering the BSP's 2nd Digital Financial Inclusion Awards yesterday.
"An off-cycle rate hike is on the table at the moment. If the data says inflation will go up very significantly and if there's a risk affecting expectations, then we may go with an off-cycle hike as early as Thursday this week," the BSP chief added.
In a previous interview, Remolona said central bank officials are monitoring the Israel-Hamas war in the Middle East after global oil prices rose.
Oil trade disruptions
Geopolitics analysts said oil trade disruptions loom with Iran, a member of the Organization of Petroleum Exporting Countries, suspected of helping the Palestinian terrorist group, Hamas, which staged a horrendous attack on Israel, killing thousands and taking away at least 200 hostages last 7 October. Israel has since retaliated, going on full-war mode against Hamas in Gaza, with the toll on lives lost in the process rising even more.
Growth in prices of transport and fuel, along with rice and other agricultural goods last month signaled supply issues with these commodities, mainly driving faster overall inflation to 6.1 percent from 5.3 percent in August and 4.7 percent in July.
"I wouldn't say that we're done with the monetary tightening. I would say it's a serious concern whether the supply shocks side will have a lasting impact," Remolona said.
In its last meeting, the BSP kept its policy rate at 6.25 percent or 425 basis-point hike after a six-month inflation downtrend from a peak of 8.7 percent in January.
The BSP would like to slow back inflation within 2 percent to 4 percent this year.
Jeepney fares hike
Remolona said the BSP will also monitor the effects of the recently approved P1.00 increase in minimum jeepney fares on overall inflation.
"The September inflation rate was a very significant spike in the headline number. One thing we were worried about was transport fare hikes and that has happened," he said.
Remolona said the BSP will determine what a healthy rate would be conducive to sustaining business activities while managing inflation.
"We relieve pressure from the demand side without affecting the growth prospects," he said.
Hindu immigrants abroad celebrate in either August or September Ganesh Chaturthi, a 10-day festival commemorating the…
President Ferdinand Marcos Jr. on Tuesday called for women’s greater representation in leadership across Southeast…
The Senate impeachment court on Tuesday denied the prosecution’s bid to compel Vice President Sara Duterte to confirm…
