IMF welcomes likelihood of more interest rate hikes

The International Monetary Fund (IMF) welcomed the possibility of more interest rate hikes from the Bangko Sentral ng Pilipinas (BSP).

Further tightening of monetary policy in the Philippines is a welcome development, IMF Asia and Pacific Division Chief Luis Breuer in a press briefing in Manila.

“The team welcomes the BSP’s announced readiness to take further action to safeguard price stability and continued progress in modernizing monetary operations and reforming the capital markets,” he said.

The central bank is widely expected to raise interest rates anew when its policy-setting Monetary Board meets on August 9, the same day the Philippine Statistics Authority (PSA) is scheduled to release the second-quarter economic growth results.

The Monetary Board has tightened policy rates twice this year—25 basis points each in May and June—based on its reading that inflation expectations remain elevated.

“The BSP’s recent decisions to increase the policy rate twice were appropriate,” Breuer said.

First Metro Investment Corp. sees the central bank raising rates by another 50 bps, also on concerns about inflation. —VDS, GMA News