MANILA (Reuters) – Philippine central bank Governor Felipe Medalla said on Friday that interest rates could be raised in a “worst-case scenario” in which inflation rises above 9 percent 50 basis points.
Bangko Sentral ng Pilipinas (BSP) next rate hike could be 23 or 23 basis points depending on Regarding the latest economic data, he said.
“The worst-case scenario is (inflation) over 9%. If that’s the case, obviously we have to do something,” Medalla told reporters.
Yearly high of 14 8.7% in January, prompting BSP to say another hike in benchmark rate this year is possible, having already been raised in 50 Basis points for February 14.
Inflation data for February will be released on March 7th, analysts will be closely watching the numbers ahead of the central bank’s next rate-setting meeting in March 23.
“Another month…a surprise uptick in inflation could spur the BSP to hike rates more aggressively,” said Nicholas Mapa, senior economist at ING.
BSP has hiked eight times since last year totaling 400 basis points,
Medalla said on Friday that he still expects inflation to return to the target range in the fourth quarter of this year.