Page 5 - Jun Neri News Today

As expected, the Bangko Sentral ng Pilipinas remained hawkish yesterday, delivering another 50-basis-point interest rate hike as there is a need for follow-through action to anchor inflation expectations and prevent price pressures from becoming further entrenched.

Inflation has not yet peaked despite easing slightly to 6.3 percent in August from 6.4 percent in July, according to economists.

The local unit closed at P57 against the greenback, as the peso finally tipped over since its previous close of P56.99.

Inflation likely remained elevated, staying above six percent for the third straight month in August due to rising global oil prices as well as increasing demand for goods and services as the economy further reopens from strict COVID quarantine and lockdown protocols, according to economists.

Philippine factory output recovered in August as production stabilized while employment in firms skyrocketed.

Inflation is likely to peak near seven percent in October if global price pressures from oil, energy and food remain substantial, according to the Bank of the Philippine Islands.

The Bangko Sentral ng Pilipinas hiked its key policy rate again on Thursday in a bid to arrest red-hot inflation dampening the economy’s recovery efforts. 

More banks are slashing their gross domestic product growth forecast for the Philippines after a disappointing second quarter outturn, as well as the expected further slowdown in the second half due to soaring inflation and tighter monetary conditions.

Most economists expect the Bangko Sentral ng Pilipinas to deliver another 50-basis-point rate hike on Thursday, as monetary authorities remain committed to steer inflation back to the government’s two to four percent target range.

Economists expect the Bangko Sentral ng Pilipinas to extend the tightening cycle by hiking interest rates until next year to address soaring inflation.