NextGen Day

Felipe Medalla, the governor of Bangko Sentral ng Pilipinas (BSP), suggested that the central bank may suspend its cycle of rate increases due to the slowing of domestic inflation.

On Wednesday (US time), Medalla noted in his presentation at the government’s economic briefing in Washington DC that the rate of price hikes had decreased from 0.3 percent in February to zero in March.

We believe we are moving in the right direction toward achieving our 2 to 4 percent goal, he added.

From 8.6 percent the month before and the 14-year high of 8.7 percent in January, the inflation rate in March decreased to 7.6 percent on an annual basis.

This year’s first quarter saw an average inflation rate of 8.3 percent.

According to the BSP, inflation will be about 6% on average this year, slowing down to within-target levels in the final three months barring any unexpected events.

The BSP expects average inflation to be 2.9 percent in 2024.

The main cause of the overall 425 basis point increase in the central bank’s key rates from May 2022 to March 2023 is the nation’s high inflation rate.

“Given how well the inflation prints are coming in, we’re probably halting at the next meeting. We are in a position to stop if April turns out to be a very low inflation month, making it three favorable points in a row, Medalla added.

The Monetary Board (MB), which sets policy for the BSP, will have its third rate-setting meeting of the year on May 18.

The April inflation report will be made public on May 5 by the Philippine Statistics Authority (PSA).

Benjamin Diokno, the finance secretary, stated in his speech that the assumption for this year’s domestic growth is between 6 and 7 percent, given the continued expansion of a favorable demographic profile and the abundance of investment opportunities, among other factors.

Diokno claimed that the anticipated impact of international economic developments is the reason for the lower gross domestic product (GDP) forecast for this year compared to the higher-than-expected 46-year high of 7.6 percent last year, which exceeded the government’s 6.5 percent to 7.5 percent target band.

He noted that the government’s fiscal health is still solid, with revenues consistently rising after the epidemic and the reopening of the economy, and that the growth estimate for this year remains “high but doable.”

For starters, infrastructure spending would increase and eventually make up between 5 and 6 percent of the nation’s annual GDP, according to Diokno.

Spending on infrastructure is at the forefront of our growth plan. We are determined to reverse the long-term underinvestment in infrastructure between 2001 and 2015 when spending on it amounted to only 2% of GDP on average, the official stated.

He claimed that once the government launched its “Build, Build, Build” campaign in 2016, which some have referred to as the nation’s “golden age of infrastructure,” the situation changed.

“We are committed to continuing this significant infrastructure investment over the next six years, but with a twist. This time, in addition to government spending, we will also use an improved public-private cooperation structure, the official said.

According to Diokno, this method would significantly improve the infrastructure for water, telecommunications, transportation, logistics, and energy. (

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