March 21, 2023

BSP gov says upcoming policy meeting will focus on inflation

Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said that inflation will be the focus of the next monetary policy meetings rather than the actions of the US Federal Reserve.

The governor previously said in December and again in January that there is less pressure to match US interest rates since the peso appears to have stabilized.

The closing trade last Feb.4 saw the exchange rate at the P53 level for the first time since June 2022, when the peso began depreciating rapidly due to the strong greenback.

“Next meeting (we) will focus on inflationary expectations in PH (Philippines), not the Fed’s 25 bps rate increase,” Medalla said on Saturday.

This follows the US Federal Open Market Committee’s decision to raise its funds rate by 25 bps to 4.5 percent to 4.75 percent in response to its own inflation problems.

The BSP’s Monetary Board will have its first policy meeting on Feb. 16.

It is expected that the central bank will also increase the key rate by 25 bps, bringing the benchmark rate to 5.75 percent from 5.5 percent.