go through Katherine K. Chen
Bangladesh ng pilipinas (BSP) If the economy shows signs of loss Momentum, BSP Governor Eli M. Remolona, Jr. It said it suggests that policy makers did not relax further even after lowering rates at three consecutive meetings.
“If we see [economic] Due to the lack of demand, output slows down, and then we will step in and lower the policy interest rate [to] Strengthen demand. “He said in an exclusive interview Thought Leader with Cathy Yang On a news Thursday.
But the BSP chief said monetary policy will be ineffective in addressing supply-driven slowdowns. He added: “If it’s a supply thing, there’s almost nothing we can do. So it has to come from decisive action on demand.”
Last month, the Philippines’ central bank lowered its benchmark interest rate by 25 basis points (BPS) to 5%, its third consecutive cut. This relaxes the whole thing Since August 2024, 150 barrels.
Mr. Remorona repeatedly described the policy setting as the “Golden Lock Rate”, Balance inflation and growth.
“What I’m going to say is that we’re in the Goldilocks area,” he said. “So if the forecasts stay … we’ll stay where we are in the policy rate. There may be a small amount of adjustments – pauses or ease – but more or less, we’ll be in the same range.”
The governor said the two-point drop in October and December was “possible, but unlikely.” He said that while forecasts for inflation and growth remain unchanged, central banks tend to remain stable.
Larger cutting is impossible. “Cutting 50 p.m. to 5 hits is a big shot,” Remorona said, stressing that relief may continue with smaller incremental steps. He added that only slowing economic activity and increasing unemployment can trigger more positive action.
Inflation in the Philippines averaged 1.7% in the first eight months, below the BSP’s 2-4% target, and accelerated slightly by 1.5% in August.
This is the sixth consecutive month of under-price growth target for consumers. The economy grew by 5.5% in the second quarter It exceeded 5.4% in the previous quarter.
BSP is expected to grow throughout the year to settle at the government’s target of 5.5-6.5%, with inflation ending at 1.7%.
The Monetary Commission held the remaining two policy meetings of the year on October 9 and December 11. Mr Remorona said the central bank usually makes decisions every two months, but he does not rule out his exclusion Non-periodic action.
“Of course, if it’s really bad, we can also raise the policy rate beyond our usual policy meeting schedule, but that’s extremely unlikely,” he said.
Remorona says policy adjustments can help banks operate more EFs in addition to immediate growthfhigh.
“For me, this is no longer a monetary policy thing,” he said. “It is a structural thing to help banks improve efficiency. Loan terms, price its deposit. ”
The head of the central bank said inflation risks are usually low. BSP expects prices to rise to 3.3% within the target range next year, compared with 3.4% in 2027.
“If it’s not that good data, then we certainly relax,” he said. “The risk of higher inflation will tighten us, and now we’re seeing it in a small way. So, I think we’re comfortable right now.”
