According to BSP Governor Eli M. Remolona, the tightening of monetary policy by the Philippine central bank will have a lasting effect and continue to be noticeable into the following year.
“According to Mr. Remolona’s interview with Bloomberg TV, the impact of stricter measures will persist for approximately three quarters until the first half of the following year. The previous increases will continue to have a negative effect on economic growth in the Philippines, due to their prolonged delays.”
The BSP maintained its primary interest rate for the fourth consecutive policy meeting on Thursday, but indicated that it may resume tightening its monetary policy at the next meeting in November if there are continued inflation concerns.
The economic growth of the Philippines in the second quarter was the slowest it has been in almost 12 years due to increased inflation and multiple interest rate increases, which negatively impacted consumer spending.
Mr. Remolona has declared that a reduction in interest rates is not expected in the near future.
“We will only consider rate cuts next year if the output numbers are significantly poor and the inflation numbers are extremely low,” stated the source from Reuters.