Bangko Sentral ng Pilipinas Governor Felipe Medalla yesterday ruled out another off-cycle move on monetary policy tightening, while signaling a rate hike of less than 75 basis points at its August.18 meeting in a continuing bid to curb red-hot inflation.
“One thing I can say is you can surprise people only once, so there will be no more off-cycle (policy move),” Medalla said at the Post-SONA (State of the Nation Address) Economic Briefing yesterday.
“My guess is you can rule out zero or 75 basis points,” he said, responding to a question on the magnitude of the BSP’s next policy action.
His remarks come ahead of Wednesday’s US Federal Reserve policy decision, with markets pricing in a near 90 percent chance it will hike by 75 bps.
The BSP’s reverse repurchase facility rate is currently at 3.25 percent following three successive hikes totalling 125 bps between May and July, including a surprise 75 bps on July 14 that was approved outside the regular schedule for policy reviews.
Medalla said future policy moves will remain data-driven, and reiterated that the economy was able to absorb rate increases.
Inflation, which averaged 4.4 percent in the first half of the year and topped the full-year 2 percent-4 percent target band, is widely expected to remain elevated in the coming months, driven by high prices of fuel and food.
