The Bangko Sentral ng Pilipinas on Friday said it would be monitoring inflation on a month-on-month basis to determine whether it will raise or cut interest rates.
“If inflation is still high, by the way, we’re looking now month-on-month because whatever happens because of sheer momentum, year-on-year will be high. So its really the month-on-month that we are watching,” Medalla said. However, Medalla said if the month-on-month inflation rates would fall to negative territory, the Monetary Board might not even hike interest rates in its next meeting.
These non-monetary measures, he added, are expected to help cool inflation in the coming months. If these measures continue, inflation may have peaked in January 2023. There may be one more increase, Medalla said at an event in Manila on Friday. A 25 basis-point move is the most likely option, he added.