Push Admin

Early interest rate hike seen to anchor inflation expectation: economist

Article (news)

Jessica Fenol and Raine Musngi, ABS-CBN News

<p>MANILA - An earlier-than-anticipated rate hike in May could help the central bank anchor inflation expectations and prevent a more aggressive policy adjustment in the second half of 2022, an economist said Thursday.</p><p>ING Bank Manila&#x27;s Senior Economist Nicholas Mapa is expecting the Bangko Sentral ng Pilipinas (BSP) to raise interest rate during its monetary meeting in May, ahead of other analysts&#x27; forecast of a rate hike in the second half of the year.</p><p>&quot;If you just follow the data, we are expecting a 25-basis point rate hike for May or June,&quot; Mapa told ANC. </p><p>&quot;When you lose the ability to get a good grasp or grip on inflation expectations, a response required to re-anchor those inflation expectations are much more aggressive than a simple token reflex,&quot; he added.</p><p>An aggressive monetary policy adjustment means up to 100-basis point hike in the second half of the year, he said</p><p>Interest rate has been maintained at 2 percent for the entire 2021 as the BSP kept its &quot;laser-focus&quot; on supporting the rebound of the pandemic-hit economy.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/02/17/22/bsp-keeps-benchmark-rate-unchanged">Bangko Sentral keeps benchmark rate unchanged to support growth</a></li>	<li><a href="https://news.abs-cbn.com/business/01/27/22/ph-economy-grows-56-percent-in-2021-beats-forecasts">Philippine economy grows 5.6 percent in 2021, exceeds target</a></li></ul><p>After <a href="https://news.abs-cbn.com/business/08/06/20/philippines-second-quarter-gdp-recession">crash-landing</a> in 2020 due to the COVID-19 pandemic, the economy emerged from recession in 2021 by slightly overshooting growth targets with a gross domestic product (GDP) growth of 5.6 percent.</p><p>Mapa said analysts are expecting a decent GDP growth number in the first quarter of 2022.</p><p>&quot;Right now, after safeguarding the recovery, all these months of accommodation, with the recovery in hand, it&#x27;s time to start focusing on its primary mandate which is price stability,&quot; he said.</p><p>&quot;So it&#x27;s good to focus on growth as well but they also must adhere to their own primary mandate which is price stability,&quot; he said.</p><p>BSP Governor Benjamin Diokno earlier said in an internal &quot;sensitivity analysis&quot; showed that the tension between Russia and Ukraine could push inflation to as high as 4.7 percent this year if the Dubai crude averages at $140 per barrel.</p><p>So far, Dubai crude is hovering around $110 per barrel in March. </p><p>Diokno said inflation, which settled at 3 percent in January and February or within the 2 to 4 percent target range, could rise in the coming months as the impact of the continued global crisis spills over to other markets worldwide. </p><p>The BSP will hold its monetary policy-setting meeting on Thursday afternoon. <br/> </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/03/14/22/inflation-seen-to-rise-amid-russia-ukraine-crisis-diokno">Inflation seen to rise as Russia-Ukraine tension push global oil price: BSP Gov</a></li>	<li><a href="https://news.abs-cbn.com/business/03/07/22/bsp-rate-hike-seen-needed-as-ukraine-crisis-spikes-oil">BSP rate hike &#x27;a must&#x27; in Q2 as oil spikes due to Russia-Ukraine crisis: analyst</a></li></ul><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=1943085" width="100%"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><div><br/> </div>

An earlier-than-anticipated rate hike in May could help the BSP anchor inflation expectations and prevent a more aggressive policy adjustment in the second half of 2022, an economist said Thursday.

Early interest rate hike seen to anchor inflation expectation: economist

News

Entertainment

Lifestyle

Sports

Metro.Style

More

Traffic

Manila

Horoscope

Business

Early interest rate hike seen to anchor inflation expectation: economist

Jessica Fenol and Raine Musngi,

ABS-CBN News

Published Mar 24, 2022 11:12 AM PHT

|

Updated Mar 24, 2022 03:31 PM PHT

Read More:

interest rate

interest rate hike

monetary policy

BSP

ING Philippines

economy

inflation

inflation expectation

ABS-CBN is the leading media and entertainment company in the Philippines, offering quality content across TV, radio, digital, and film. Committed to public service and promoting Filipino values, ABS-CBN continues to inspire and connect audiences worldwide.

Corporate

Investors

Governance

International Distribution

Corporate

Governance

Investors

International Distribution

NPC Seal of Registration

Privacy Policy

AI Policy

Terms of Service

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.