Expensive oil and electricity prices as well as the depreciation of the peso may have caused inflation to breach the 6-percent mark in September, according to the Bangko Sentral ng Pilipinas (BSP).
In its month-ahead inflation forecast, BSP said inflation could have averaged 5.3 to 6.1 percent in September. In August, inflation averaged 5.3 percent. (Full story: https://businessmirror.com.ph/2023/09/06/august-inflation-swells-to-5-3-on-price-spikes/)
However, BSP noted that lower rice and meat prices could contribute to downward price pressures for the month. It can be noted that President Ferdinand R. Marcos Jr. set a nationwide price cap on rice this month. (Full story: https://businessmirror.com.ph/2023/09/02/pbbm-sets-nationwide-cap-on-rice-price/)
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” BSP said in a statement.
The BSP disclosed that it intends to raise interest rates anew in its next meeting and maintain this rate until the end of the first semester of next year.
BSP Governor Eli M. Remolona Jr. had announced that the Monetary Board decided to maintain its key policy rates for the fourth consecutive month this year.
BSP’s Target Reverse Repurchase (RRP) Rate was maintained at 6.25 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were retained at 5.75 percent and 6.75 percent, respectively.
When asked whether the BSP is considering hiking rates in November, Remolona said, “Well, honestly, yes.” (Full story: https://businessmirror.com.ph/2023/09/22/bsp-keeps-rates-but-signals-a-hike-in-november/)
Remolona also went on to say that the expected rate hike in November would not be the last as conditions may merit more than one rate hike.
Remolona said the central bank is considering a rate hike in November as mounting inflationary pressures are bound to increase in the coming months.
Remolona said while Thursday’s vote to maintain policy rates was unanimous; the vote was “pretty close between hiking and not hiking.” (Full story: https://businessmirror.com.ph/2023/09/22/bsp-chief-hints-at-possible-rate-hikes-until-next-year/).
Image credits: Junpinzon | Dreamstime.com
