MANILA (Reuters) – Philippine Finance Secretary Benjamin Diokno said on Sunday he thinks the central bank is inclined to pause interest rate hikes at its next monetary policy meeting, scheduled for May.
“Non-monetary measures to mitigate inflation could be more effective in addressing the problem”, including measures already taken by fiscal authorities, Diokno said in a statement.
The Philippine central bank decided on Thursday to continue its fight against inflation with rate hikes, albeit at a slower pace, from 25 basis points (bps) to 6.%.
BSP Governor Felipe Medalla said the central bank’s next policy decision will largely depend on the performance of consumer prices in the coming months.
The latest BSP rate hike brings
an overall tightening basis implemented since May, Diokno said the full impact of which has not yet been absorbed by the economy, given that monetary policy is usually linked to long-term lag.
“In my opinion, monetary authorities have done enough. Monetary policy is not the only game in play. Also… monetary policy with long lags,” said Diokno, who sits on the central bank’s seven-member monetary committee.
(This story has been refiled to correct “seven people” instead of “seven months” in paragraph 6)