According to Philippine Finance Secretary Benjamin E. Diokno, the central bank has sufficiently implemented policy measures to control inflation. However, he also emphasized that any future changes in interest rates would be based on data.
Mr. Diokno expressed a similar sentiment to that of the country’s economic planning minister, who stated on Friday that additional rate increases may not be needed due to inflationary pressures in the Philippines being caused by supply-side factors.
In September, the yearly inflation rate increased for a second consecutive month to 6.1%, resulting in a year-to-date average rate of 6.6%. This is significantly higher than the central bank’s target range of 2%-4% for the year.
Mr. Diokno remarked that there has been a decrease in the overall impact of price changes, as seen in the core inflation rate of 5.9% in September compared to 6.1% in the previous month, due to the exclusion of fluctuating food and energy prices.
During a press conference on Friday, Mr. Diokno, a member of the monetary board responsible for policy making, stated that “we have accomplished our goals” and announced that core inflation has decreased. The statements will be officially released on Monday.
The central bank of the Philippines has maintained a constant benchmark interest rate of 6.25% in its four most recent meetings. On Friday, it announced its readiness to resume tightening measures as necessary.
The next meeting will take place on November 16th to assess policies, following the release of the Philippines’ third quarter growth data on November 9th.
A group of economists suggested that the inflation rate in September, which exceeded market predictions, may lead to the central bank increasing interest rates again in the upcoming month.
Mr. Diokno predicts that the second half of the year will see a quicker growth rate compared to the first half’s 5.3% expansion. This is due to the expected increase in infrastructure spending during the last quarter. Manila has set a growth target of 6.0-7.0% for the year 2023.