Following the Philippine Statistics Authority’s (PSA) release of January’s inflation figures on Tuesday, ING Bank Manila’s Senior Economist Nicholas Mapa said that a key rate hike by 50 basis points (bps) is now on the table.
With the January figures above the consensus forecast, the “upside surprise” to inflation is that a 50 bps rate hike is now likely, Mapa said in a tweet.
“We’ve maintained that PHL inflation is driven by confluence of supply and demand side pressures. Inflation is now also broad based with 9 out of 13 sub sectors reporting inflation above target. Too early to call peak but inflation will be sticky in 2023,” he added.
According to Mapa, the central bank has done its part in alleviating pressure on the demand side.
“Hopefully we get supply side remedies to address the other side of the inflation equation,” Mapa said.