MANILA, Philippines — The Bangko Sentral ng Pilipinas is not ruling out a 25-basis-point hike in key policy rates next month as inflation accelerated for the second straight month, to hit a five-month high of 6.1 percent in September from 5.3 percent in August.
Inflation averaged 6.6 percent from January to September, well above the BSP’s two to four percent target range, after quickening for two straight months due to soaring oil and food prices. Based on earlier estimates, the BSP said inflation would return to the two to four percent target by the fourth quarter of this year.
“The upside risks that we feared, some of them have materialized already. One thing we were worried about was a transport fare hike, and that has happened. I wouldn’t say that we’re done with the tightening. I would say it’s a serious concern whether supply-side shocks would have a lasting impact. Normally, they don’t have a lasting impact, but once they get into expectations, once they get into wages, it becomes an issue for us,” the BSP chief said.“Of course we only control the demand side.
Last week, National Economic and Development Authority Secretary Arsenio Balisacan warned that further rate hikes could hurt the economy amid high inflation.
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