MANILA - Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Thursday said the Monetary Board could implement another 25-basis points hike to the benchmark rate in its June meeting as part of its policy normalization.
The BSP this month hiked the interest rate by 25 bps to 2.25 percent, the first upward adjustment in 3 years to curb rising inflation.
"Right now it is 2.25 percent. I think I have signaled that we are probably going to have another 25 bps adjustment in our next monetary board meeting on June 23rd," Diokno said in a briefing.
The BSP cut the overnight borrowing rate to a record low of 2 percent in November 2020 to support the recovery of the pandemic-hit economy. But inflation, which has been rising globally, has pushed the BSP to keep pace with other central banks that have also tightened policy.
DIOKNO AS NEXT FINANCE CHIEF
Diokno, who was named as the next Finance Secretary under the incoming administration of President-elect Ferdinand Bongbong Marcos Jr, said he intends to retain most Undersecretaries as well as National Treasurer Rosalia De Leon.
When asked about his stand on the 63.5 debt-to-GDP ratio, which is slightly above the international standard of 60 percent, Diokno said "My position is... I don’t think that is cause for concern."
"Because as long as we continue to grow at around 6 to 7 percent on a sustainable basis, we can easily outgrow our debt," he added.
The government recently narrowed its growth target for the year to 7 to 8 percent range from 7 to 9 percent.
More details to follow.