{"id":20052,"date":"2024-08-06T03:08:39","date_gmt":"2024-08-06T03:08:39","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-sees-room-to-keep-rates-steady\/"},"modified":"2024-08-06T03:08:39","modified_gmt":"2024-08-06T03:08:39","slug":"bsp-sees-room-to-keep-rates-steady","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-sees-room-to-keep-rates-steady\/","title":{"rendered":"BSP sees room to keep rates steady"},"content":{"rendered":"
\n

By Luisa Maria Jacinta C. <\/b>Jocson, <\/b><\/span>Reporter <\/i><\/p>\n

THE PHILIPPINE central bank <\/span>would probably keep policy settings on hold given \u201cevolving inf<\/span>lation conditions,\u201d Governor Eli M. Remolona, Jr. said on Monday, even as he signaled a less restrictive stance if price pressures continue to ease.<\/p>\n

\u201cEvolving inflation conditions show that the BSP (Bangko Sentral ng Pilipinas) can hold its policy settings steady for the time being,\u201d Mr. Remolona said during a Development Budget Coordination Committee (DBCC) brief<\/span>ing before the House Committee on Appropriations on Monday.<\/p>\n

\u201cIf price pressures continue to ease, it will be possible for the BSP to consider a less restrictive monetary policy stance.\u201d<\/p>\n

In June, the BSP kept policy rates unchanged at an over 17-year high of 6.5% for a sixth straight meeting. Mr. Remolona has previously signaled that the central bank is on track to cut rates by August, possibly by 25 basis points.<\/p>\n

The Monetary Board\u2019s next rate-setting meeting is on Aug. 15.<\/p>\n

Mr. Remolona said lingering supply concerns and geopolitical tensions warrant continued and close monitoring of risks to the inf<\/span>lation outlook.<\/p>\n

Headline inflation likely accelerated to 4% in July, according to a BusinessWorld<\/i> poll of 15 analysts conducted last week, mainly due to high food and electricity prices.<\/p>\n

If realized, this could mark the eighth straight month that inf<\/span>lation settled within the BSP\u2019s 2-4% target band.<\/p>\n

July inf<\/span>lation data will be released today (Aug. 6).<\/p>\n

Mr. Remolona said the balance of risks to the in<\/span>f<\/span>lation outlook has tilted to the downside mainly due to the recently approved tari<\/span>f<\/span>f cut on rice imports. <\/span><\/p>\n

\u201cIn the BSP\u2019s latest forecast, the rice tarif<\/span>f reduction will have a very significant downside impact on the inflation trajectory until 2025,\u201d he added.<\/p>\n

In June, President Ferdinand R. Marcos, Jr. signed Executive Order No. 62, which slashed tarif<\/span>fs on rice imports to 15% from 35% previously, until 2028.<\/p>\n

This is part of a reduced tarif<\/span>f regime for other agricultural products such as pork and corn intended as inf<\/span>lation-containment measures.<\/p>\n

Mr. Remolona said the recent order will be \u201chelpful in our efforts to tame inflation.\u201d <\/span><\/p>\n

\u201cSince August 2023, however, inf<\/span>lation has been dominated by rice prices. If inf<\/span>lation were driven just by demand, there would be a more even distribution of these different components of inf<\/span>lation.\u201d<\/p>\n

\u201cOur survey showed that when people worry about higher prices, when we ask them why, over 90% will say it\u2019s because of the price of rice,\u201d he added. <\/span><\/p>\n

Rice inf<\/span>lation eased to 22.5% in June, marking the third straight month of slower rice inf<\/span>lation. Rice accounted for almost half of overall inf<\/span>lation during the month.<\/p>\n

As of Aug. 2, the price of a kilogram of well-milled rice averaged P48-P55 from P41-P49 in the same period a year ago. Regular-milled rice averaged P45-P55 from P37-P44 a year earlier.<\/p>\n

\u201cIndeed, there is strong empirical evidence that suggests that rice prices affect inflation expectations to a very large extent. And these inflation expectations lead to second-round ef<\/span>fects,\u201d Mr. Remolona said.<\/p>\n

Meanwhile, Mr. Remolona said he sees inf<\/span>lation settling within the 2-4% target this year and in 2025, as well as inf<\/span>lation expectations remaining \u201cwell-anchored.\u201d<\/p>\n

However, he still cited upside risks to this outlook.<\/p>\n

\u201cThese risks will come from higher domestic prices of food items other than rice, from transport charges, and from electricity rates,\u201d Mr. Remolona said.<\/p>\n

National Economic and Development Authority Secretary Arsenio M. Balisacan also cited other factors that could stoke inf<\/span>lation, such as wage adjustments.<\/p>\n

\u201cRisks related to inflation, such as potential adjustments in fare, wage, and service utility fees, have the potential to signi<\/span>f<\/span>icantly curb spending. It is imperative that we carefully consider these factors in our economic planning and decision-making processes,\u201d he told lawmakers.<\/span><\/p>\n

Last month, the Regional Tripartite Wages and Productivity Board approved a P35 minimum wage hike for workers in the National Capital Region, which took e<\/span>f<\/span>fect on July 17.<\/span><\/p>\n

Programs like Pambansang Pabahay Para sa Pilipino Housing (4PH) may also have unintended inf<\/span>lationary impacts, Mr. Balisacan said.<\/p>\n

\u201cThe projected rapid economic growth, particularly with the implementation of the 4PH program, could lead to upward inflationary pressures and stall economic gains.\u201d<\/p>\n

The 4PH is the government\u2019s <\/span>f<\/span>lagship housing program. The government seeks to build a million <\/span>housing units yearly under the program until 2028.<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE PHILIPPINE central bank would probably keep policy settings on hold given \u201cevolving inflation conditions,\u201d Governor Eli M. Remolona, Jr. said on Monday, even as he signaled a less restrictive stance if price pressures continue to ease.<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[5796,14644,3550,8579,4605,231,15525],"class_list":["post-20052","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-bsp","tag-bworldonline","tag-keep","tag-rates","tag-room","tag-sees","tag-steady"],"yoast_head":"\nBSP sees room to keep rates steady - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/bsp-sees-room-to-keep-rates-steady\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP sees room to keep rates steady - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"THE PHILIPPINE central bank would probably keep policy settings on hold given \u201cevolving inflation conditions,\u201d Governor Eli M. 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