MANILA - The monetary board is unlikely to tighten interest rates at least until the end of the year, Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said Monday.
"It would appear that there won’t be any policy rate adjustments between now and the end of the year...The harm from early monetary tightening exceeds the harm of moving too late, given the nascent state of economic recovery," Diokno told ANC.
The BSP kept the interest rate at its lowest level of 2 percent for 7 consecutive policy meetings. There are 2 more policy meetings before the end of the year.
"We are fairly comfortable that we don’t need to raise interest rates at this time," Diokno said.
The Philippines is buoyed by its strong macroeconomic fundamentals including hefty international reserves, strong inflows from foreign direct investments, exports as well as Business Process Outsourcing (BPO) receipts, Diokno told ANC.
Other central banks have raised interest rates likely due to the fear of inflation and are probably dealing with an exchange rate deterioration, Diokno said.
The BSP chief reiterated that the uptick in inflation remains transitory as it is expected to settle at 3.3 percent in 2022 and 3.2 percent in 2023 or within the government target of 2 to 4 percent.
Inflation in September is at 4.8 percent.
EMBED IVS ANC 09:44 to 09:51