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In light of the need to address issues causing inflation, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla could not completely rule out further increases in the key policy rates of the central bank on Wednesday.

Medalla stated that any modification to the BSP’s main rates during this Thursday’s rate-setting meeting of the decision-making Monetary Board (MB) would range from 25 to 50 basis points during the Economic Journalists Association of the Philippines-San Miguel Corporation (EJAP-SMC) economic conference.

We won’t rule out further rate increases in the upcoming meetings because, as you know, we want the midpoint of the forecast for next year to be below 4 percent (percent). And for 2024, I’d like to go as near to 3 (percent),” he remarked.

The administration has set a 2–4% inflation target for 2022–2024.

In the first seven months of the year, the average rate of price rise was 4.7 percent; however, the rate increased to 6.4 percent in July, the highest level since October 2018.

The BSP expects annual average inflation to be 5% this year.

Up until now, the conflict between Russia and Ukraine increased pricing for other commodities, and supply shortages for some foodstuffs have all contributed to rising oil prices on the world market.

It is challenging to predict what the MB’s upcoming policy rate decisions will be, according to Medalla, “since a lot of the things that promote inflation may diminish.”

The dependence of the local economy on the inflow of overseas Filipino workers (OFWs) and the business process outsourcing (BPO) sector, among others, has reduced the correlation between the growth of the domestic economy and the global economy, according to him.

According to Medalla, the nation imports a lot of food and gasoline.

So if those circumstances go in our favor, he continued, “we will need fewer rate hikes when food availability improves and gasoline costs decline.”

The BSP has raised its benchmark interest rates a total of 125 basis points so far.

At the same event, Socioeconomic Planning Secretary Arsenio Balisacan downplayed the necessity of enacting price controls to combat the rising rate of inflation.

Because it causes more harm than good, particularly over the medium and long terms, he advised against using price controls to curb inflation.

Instead, he emphasized the necessity of utilizing already available government resources to assist the weaker sectors and meet their needs.

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