Moody’s Analytics, a division of Moody’s Corp., said Monday inflation in the Philippines likely accelerated to 8.9 percent in February from a 14-year high of 8.7 percent in January, which may prompt the Bangko Sentral ng Pilipinas to again raise the interest rates in its next policy meeting.
The Philippine Statistics Authority will release the official inflation data on Tuesday.
Moody’s Analytics earlier said inflation in the country could be “stubbornly elevated” and odds were high that the monetary policy tightening cycle would run for longer in the Philippines than elsewhere in Asia.
BSP Governor Felipe Medalla said monetary authorities remained hawkish and were ready to act accordingly if inflation in February continued to accelerate.
“We are still hawkish… If the February inflation is bad, we will act. But we are hawkish for a reason…It is the data,” Medalla said last month.
He said the most likely scenario could be one more rate hike, but this could change depending on the trajectory of inflation.
The BSP on Feb. 16, 2023 raised the benchmark policy interest rate by another 50 basis points to 6 percent to rein in inflation that blew past the target range last year.BSP data showed the last time the policy rate hit 6 percent was in August 2008 during the global financial crisis.
The BSP’s Monetary Board noted that the latest baseline inflation forecast path had shifted higher relative to the previous assessment. Average inflation is projected to breach the upper end of the 2 percent to 4 percent target range at 6.1 percent in 2023, before returning to 3.1 percent in 2024.
