Economy 2 MIN READ

UPDATE 1-Philippine sees adjustments in H2, but ready for pre-emptive action

April 5, 2022By Reuters

Recasts lead, adds comments from governor and economist

By Neil Jerome Morales

The Philippines’ central bank is still looking at policy adjustments starting in the second half of the year, but is ready to take pre-emptive action if inflation expectations are at risk of being “disanchored”, its governor said on Tuesday.

“We’re still looking at the second half of the year for our normalisation strategy,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno told a news conference.

Favourable signs of economic recovery will allow the central bank to consider adjustments in its monetary stance, he said.

The Philippines’ consumer price index rose 4.0% last month from a year earlier, near the upper end of the central bank’s projected range of 3.3% to 4.1% for the month. nL2N2W301Z

Analysts and economists expect the central bank to raise its benchmark interest rate PHCBIR=ECI in the second half. The BSP has kept its key rate at a record low of 2.0% since November, 2020 as it supports the economy’s recovery from the coronavirus pandemic.

Managing monetary policy will be a “tough and delicate balancing act” between preventing a further rise in inflation and helping sustain the fragile economic recovery, said Michael Ricafort, economist at Rizal Commercial Banking Corp in Manila.

(Reporting by Neil Jerome Morales
Editing by Ed Davies and Kanupriya Kapoor)

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