Bangko Sentral hikes benchmark rate by 50 bps to 6 percent, highest since Aug. 2008

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<p><br/>MANILA (UPDATE) - The Bangko Sentral ng Pilipinas on Thursday hiked its benchmark overnight reverse repurchase rate by 50 basis points, bringing it to 6 percent as it tries to tame inflation. </p><p>The 6 percent rate is the highest since August 2008, or near a 15-year high.</p><p>&quot;In deciding to raise the policy interest rate anew, the Monetary Board noted that the latest baseline inflation forecast path has shifted higher relative to the previous assessment,&quot; BSP Gov. Felipe Medalla said.</p><p>For 2023, the inflation outlook was revised upwards to 6.1 percent from 4.3 percent. But it is expected to settle within the target at 3.1 percent by 2024, the BSP said.</p><p>Medalla said the recent monetary action could help dampen potential demand-side pressure and second-round effects without hindering sustained economic growth.</p><p>He said they would continue to take action through the use of monetary policy adjustments. A 25 bps to 50 bps hike is possible in the second policy meeting of the year set on March 23, he said.</p><p>An analyst meanwhile said the policy rate may hit 7 percent “either in the first quarter or towards the second half of the year.”</p><p>Jonas Ravelas, eManagement for Business and Marketing Services of the Asian Institute of Management, also said the government needs to do more to bring inflation back to within the 2 to 4 percent target range. </p><p>“Inflation can&#x27;t be fixed by just monetary policy. We need to see more gov&#x27;t actions particularly on food items so how are we going to address the issues that were already highlighted such as the high global food prices supply chain disruption,” Ravelas said. </p><p>Medalla agreed that inflation may slow down, but this will require more action from the government. </p><p>&quot;The Monetary Board also reiterates its encouragement and support for timely and more aggressive whole-of-government actions to mitigate the impact of persistent supply-side pressures on food prices, including trade‑positive measures and significant progress to boost productivity,” the BSP chief added. </p><p>After keeping the rate at a record low of 2 percent during the height of the COVID-19 pandemic, the central bank has hiked the benchmark by a cumulative 400 basis points since May last year amid surging inflation.</p><p>Last January, inflation hit a fresh 14-year high of 8.7 percent, breaching even the BSP&#x27;s own forecast range of 7.5 to 8.3 percent. </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/02/07/23/inflation-quickens-to-87-percent-in-january-2023">Inflation quickens to 8.7 pct in January as housing, water, power costs rise</a></li>	<li><a href="https://news.abs-cbn.com/business/01/23/23/bsp-hikes-ceiling-on-credit-card-fees-to-3-percent">Bangko Sentral hikes ceiling for credit card fees to 3 percent</a></li></ul><div><br/><strong>- with a report from Warren De Guzman, ABS-CBN News</strong></div><div><strong>RELATED VIDEO:</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2451984" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div>

The Bangko Sentral ng Pilipinas on Thursday hiked its benchmark overnight reverse repurchase rate by 50 basis points, bringing it to 6 percent as it tries to tame inflation. 

Bangko Sentral hikes benchmark rate by 50 bps to 6 percent, highest since Aug. 2008 | ABS-CBN

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Bangko Sentral hikes benchmark rate by 50 bps to 6 percent, highest since Aug. 2008

ABS-CBN News

Published Feb 16, 2023 03:08 PM PHT

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Updated Feb 16, 2023 05:51 PM PHT

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