poll last week showed 15 out of 16 analysts anticipate the Monetary Board increasing its benchmark interest rate at its June 23 meeting. However, analysts appear divided on the pace of tightening, with nine analysts seeing a hike of 25 bps while six analysts anticipate an increase of 50 bps.
“We think that continued moderate hikes by the BSP will allow the economy to absorb interest rate increases at a more measured pace. In this time of uncertainty, it also provides time for the BSP to assess the impact of monetary tightening on our growth recovery,” she said.editors, incoming BSP governor and current Monetary Board member Felipe M. Medalla signaled the pace of subsequent tightening will be gradual, ruling out rate hikes of more than 25 bps.
Philippine National Bank economist Alvin Joseph A. Arogo said he now expects a 50-bp increase by the BSP after the Fed’s latest rate hike and the peso breaching the P53-$1 level. The Monetary Board kicked off its tightening cycle on May 19 by raising the yield on the BSP’s overnight reverse repurchase facility by 25 bps to 2.25%. Interest rates on the overnight deposit and lending facilities were also hiked to 1.75% and 2.75%, respectively.rst increase in borrowing costs since 2018 and followed cuts worth 200 bps in 2020 as the BSP moved to support the economy amid the coronavirus pandemic.
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