Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila Jr. (PNA file photo)
MANILA – The Bangko Sentral ng Pilipinas (BSP) need not mirror movements of the Federal Reserve given the intrinsic developments on domestic inflation.
During the Singapore leg of the Philippine economic briefing on Thursday, BSP Deputy Governor Francisco Dakila Jr. said “policy actions (of the Fed) will, of course, remain relevant.”
Dakila said policy decision of the Federal Reserve right now is considering to be “less of a factor in (the BSP’s decision making.”
This, he said, is because “right now, domestic considerations carry more weight.”
“And even if the Fed decides to pause with its policy tightening, which it did this morning, we may not move in complete lockstep if the domestic inflation picture warrants a different response,” he added.
The inflation rate continues to decelerate, with the May 2023 figure down to 6.1 percent from 6.6 percent the previous year.
The continued slowdown of inflation rate is the primary reason for the decision by the BSP’s policy-making Monetary Board (MB) to maintain the central bank’s key rates during its rate setting meeting last month, the first after the series of rate hikes that started in May 2022.
Dakila said they continue to see the rate of price increases slowing further in the coming months and for this returning to within the government’s 2 to 4 percent target band in the last quarter of this year. (PNA)
