“The Monetary Board recognized that a further tightening of monetary policy was warranted by persistent signs of sustained and broadening price pressures,” central bank Deputy Governor Chuchi Fonacier said in a press briefing. Consumer price growth accelerated to 6.4 percent last month, well above the BSP’s 2.0-4.0 percent target for the year. Commenting on the latest rate hike, analysts from London-based research consultancy Capital Economics, ING Bank Manila, and Japan’s Nomura all said that continued monetary policy tightening was likely. ING Bank Manila senior economist Joey Cuyegkeng, meanwhile, said the BSP could be prompted to continue tightening as inflation expectations would remain elevated going into 2019. “[I]t will be imperative for non-monetary policy measures to help alleviate prices pressures as we approach the all-important Christmas season, a crucial turning point ahead of the mid-term election in May,” he said.

Source: Manila Times September 27, 2018 16:30 UTC