Fight vs inflation far from over - BSP

Bangko Sentral ng Pilipinas Governor Eli Remolona said it is too soon to declare victory in the fight against inflation, signaling a higher-for-longer rate environment, as inflationary risks continue to cloud the outlook.

- KEISHA TA-ASAN

“The models and the data seem to suggest that it’s still too soon to declare victory. We seem to be on our way, but there’s not enough data to assure us that we will settle comfortably within our target range of between two and four percent,” Remolona told reporters in a press conference yesterday.

Inflation quickened to a two-month high of 3.4 percent in February from 2.8 percent in January. Still, it marked the third straight month that inflation settled between the target range.

To tame inflation and stabilize the peso, the BSP has raised the key interest rate by 450 basis points to 6.50 percent, the highest in nearly 17 years. The Monetary Board has been keeping rates steady since its last 25-basis-point off-cycle increase on Oct. 26, 2023.

According to Remolona, the BSP’s risk-adjusted inflation forecast is still near the upper end of the central bank’s two to four percent target.