The Central Bank of the Philippines (BSP) opted to keep its policy interest rate at 6.50% in its latest meeting held today (Nov. 16), aligning with forecasts. The decision reflects a strategic wait-and-see approach to gauge the recent rate adjustments’ impact on the Philippine economy, amidst mitigated inflation risks and a strengthening peso, while leaving room for potential future adjustments.
The BSP’s decision to maintain the policy interest rate at its current 6.50% level aligns with expectations, echoing predictions from the majority of economists. A Bloomberg survey involving 22 economists revealed that 17 anticipated the BSP to retain the policy rate in today’s meeting. Following an emergency session on Oct. 26, where the BSP increased the policy rate by 0.25%, five economists projected an additional 0.25% hike.
Reports indicate that the BSP Governor Eli Remolona convened an emergency meeting three weeks ago, prompted by escalated inflation risks at that time. However, subsequent observations witnessed a subsiding of inflationary pressures and a bolstering of the peso. The adjustment in policy rates came amidst widespread anticipation that the US Federal Reserve (Fed) might halt its policy rate hikes.
While the BSP’s decision to maintain the status quo at 6.50% aligns with prevailing economic expectations, it also indicates the central bank’s prudence in calibrating monetary measures. This strategic approach aims to harness the recent rate adjustments’ potential impact on the domestic economy, ensuring a balanced response to evolving economic dynamics and global monetary policy shifts.