MANILA – The Bangko Sentral ng Pilipinas may raise its benchmark rate by another 50 basis points with the year, with inflation expected to stay above its target range, an analyst said.
A further 50-basis point hike will bring the overnight borrowing rate to 4.5 percent and will match a 50-basis point increase last Aug. 9.
“The upside inflation surprise in July and a further broadening of price pressures have prompted the BSP to adopt a more hawkish stance,” Fitch Analytics senior analyst Raphael Mok said.
Fitch raised its 2018 inflation forecast for the Philippines to 5 percent from 4.5 percent. The 2019 forecast of 4.3 percent was unchanged, Mok told ANC.
Higher oil prices, a weakening currency and after effects from tax reform will likely fan inflation, he said.
Consumer prices rose 5.7 percent in July, exceeding the BSP’s goal for the fifth straight month and quickening for the seventh straight month.
Official inflation data for August will be released on Sept. 5. (ABS-CBN News)
