BSP sees 25 or 50 bps rate hike in March

The Philippine central bank on Friday flagged a 25 or 50 basis points rate hike at its next meeting, with inflation as the primary concern, its governor said in television interviews.

“The choice is really between 25 or 50 (basis points) in the next meeting, unless we see an actual negative month-on-month inflation,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla told Bloomberg TV.

The central bank is open to more hikes beyond 50 basis points if there is a need for it and depending on data, he said.

Inflation, running at a 14-year high of 8.7% in January, is the BSP’s primary concern, with interest rate hikes meant to increase the chances of a lower than 4% year-on-year inflation by the end of 2023, Medalla told CNBC Asia TV.

The central bank raised its benchmark interest rate by 50 basis points on Thursday, at its first rate-setting meeting this year, and said it was difficult to rule out needing a third or fourth increase.

Monetary authorities, which have raised rates eight times for a total of 400 basis points since last year, will next meet on March 23. — Reuters