BSP holds rates steady

But November rate hike on the table

MANILA, Philippines — Monetary authorities are expected to deliver a rate hike in November after maintaining a hawkish pause for four straight rate-setting meetings, according to Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.

Remolona, who also chairs the central bank’s Monetary Board, said in a press conference that monetary authorities are considering resuming its hiking cycle in the next rate-setting meeting scheduled on Nov. 16.

“Honestly, yes,” Remolona replied when asked if the BSP is considering a hike in November.

“A rate hike is on the table for November. How big it will be will depend on the data. How bad the data is with respect to inflation especially,” he said.

The BSP yesterday kept interest rates steady anew as part of a hawkish pause wherein key policy rates were left untouched in May, June, August and September.

“Rate cuts this year, 2023, are off the table. Yes, the cuts are off the table, while rate hikes are not off the table,” Remolona said.

The BSP chief pointed out that the BSP is likely to keep interest rates steady anew in the first half of next year.

“I expect rates to be at the level they are at at the end of this year. We have a meeting in November, so if we raise in November then I expect rates to stay at that level for the early part of next year,” he said.

At its meeting yesterday, the Monetary Board decided to maintain the BSP’s target reverse repurchase (RRP) rate at 6.25 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were retained at 5.75 percent and 6.75 percent, respectively.

The Monetary Board raised interest rates by 425 basis points during a tightening cycle between May 2022 to March this year