After kicking off the year with a 50-basis-point interest rate hike, the Bangko Sentral ng Pilipinas is expected to further raise key policy rates by another 25 to 50 basis points next month to bring inflation back to within the two to four percent target and anchor inflation expectations. In an interview with Bloomberg Television, BSP Governor Felipe Medalla has ruled out the possibility of a hefty 75-bp hike in the next rate-setting meeting of the Monetary Board scheduled on March 23.
The Philippine economy is expected to grow by more than seven percent this year after roaring back in the third quarter despite soaring inflation and rising interest rates, economists said. DBS Bank Ltd. of Singapore raised its 2022 gross domestic product growth forecast for the Philippines to 7.4 percent but maintained its 6.3 percent projection for next year.
The Bangko Sentral ng Pilipinas is likely to hike key policy rates by 175 basis points more, bringing the benchmark interest rate to six percent by the first quarter of next year, according to DBS Bank of Singapore.
More banks are slashing their gross domestic product growth forecast for the Philippines after a disappointing second quarter outturn, as well as the expected further slowdown in the second half due to soaring inflation and tighter monetary conditions.