Philippine Central Bank Head Says ‘Too Early’ to Halt Rate Hikes

It may be too soon for the Philippine central bank to pause from raising interest rates at its next policy meeting in May, Governor Felipe Medalla said, signaling its most aggressive tightening cycle in two decades could continue, Bloomberg News reported. May is “too early” to pause, “unless we actually see a price fall,” Medalla said in an interview Thursday on the sidelines of the Association of Southeast Asian Nations forum in Bali, Indonesia. The Bangko Sentral ng Pilipinas remains “cautious” and needs to see “enough low month-on-month inflation, to give the public confidence that the BSP forecast of inflation averaging 2.9% is quite likely,” he said, referring to its 2024 estimate. Annual inflation stood at 8.6% in February, still near a 14-year high, and the core price gauge, which strips out volatile food and fuel costs, was the fastest in 24 years. Medalla said the central bank could pause its rate hike cycle if prices decline on a month-on-month basis. The price index in February was unchanged from January. Read more.