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The
Bangko Sentral ng Pilipinas (BSP) said on Friday it has
adopted a near-term monetary policy that may only be
described as restrictive.
This
acknowledgment indicates a likelihood that the Monetary
Board, the BSP’s policymaking body, would raise interest
rates again during its next meeting on July 17.
“Because
inflation is proving more of a concern, the policy bias
is toward tightening,” deputy BSP Governor Diwa C.
Guinigundo said.
Inflation quickened to a 14-year high of 11.4 percent in
June, from 9.5-percent adjusted level last May. The
National Statistical Office earlier reported the May
inflation at 9.4 percent.
Beyond
his innuendos of raising interest rates, Guinigundo did
not elaborate.
The
current BSP overnight rates are 5.25 percent for
borrowing and 7.25 percent for lending.
The
central bank could also increase the deposit reserve
ratio of 21 percent to limit the money in the system,
among other monetary-policy tools, although this is not
really an option the monetary authorities are looking
at, according to Guinigundo.
BSP
Governor Amando Tetangco Jr. said earlier that high
inflation is not unique to the Philippines.
Central
banks around are now trying contain double-digit
inflation that, in the case of the Philippines, will
likely peak this third quarter before it starts to
recede “towards single-digit levels in 2009,” according
to Tetangco.
“We
share the view that current food and oil prices are not
sustainable, producing global slowdown and widespread
inflation in all countries. Demand pressures will
moderate as monetary policy is tightened. For the
Philippines, we should be back to normal cycle by next
year,” Tetangco said.
He and
six other members of the Monetary Board, increased the
policy rates of the BSP by 25 basis points on June 5. |
