Philippines can still handle another rate hike - BSP

MANILA – The Philippine economy can still absorb one more rate hike, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said on Monday.

“Kayang-kaya pa (It still can),” Remolona said at a luncheon when asked about whether the economy can still handle further monetary policy tightening.

Last month, the central bank’s Monetary Board raised its key policy rates by 25 basis points, citing persistent inflationary pressures amid elevated global oil and fertilizer prices.

READ MORE: PH may implement up to 5 rate hikes due to inflation risks

The latest adjustment brings the BSP’s target reverse repurchase (RRP) rate to 4.75 percent.

The interest rates on the overnight deposit and lending facilities were likewise increased to 4.25 percent and 5.25 percent, respectively.

Remolona, meanwhile, said the country’s upper-middle income status just shows that “there are good fundamentals that are in place.”

“Malaking bagay yun ah —6 percent growth for several years (That is a significant achievement —6 percent growth over several years). So some things are, some fundamentals are, there are good fundamentals that are in place. Ang trabaho natin ngayon ay ituloy yon tapos sana mabawasan yung inequality, mabawasan yung poverty. Meron tayong fundamentals na magagamit (Our job now is to sustain that momentum and, hopefully, reduce inequality and poverty. We have the fundamentals to work with),” Remolona said.

READ MORE: How Cebu households can save energy amid looming power rate hike

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