- "Very little" contagion on the Philippine side - finmin
- Philippine c.bank to hold rate-setting meeting on Thursday
According to Reuters article published on March 20, 2023, the Philippine central bank could decide to opt for a narrower 25 basis points (bps) interest rate hike or keep policy settings unchanged at its meeting this week, amid uncertainties in the global banking system, the finance minister said on Monday.
Global financial markets are reeling from a string of bank failures and fears of contagion at a time when many central banks are hiking interest rates to battle elevated inflation.
"There's very little contagion on the Philippine side and in fact it can be a positive in the sense that central banks are likely to ease on hiking of interest rates," Finance Secretary Benjamin Diokno told a forum organised by foreign journalists.
"The option now is not to hike or to hike by 25 basis points," said Diokno, who said he is just one of the seven-person policy-making monetary board and that he could be outvoted.
The Philippine banking sector remains safe, the central bank said on Friday, adding that the country's lenders do not have any material exposure to the failed institutions.
Earlier this month, the country's central bank governor flagged an up to 50 bps rate hike.
Diokno expressed optimism that inflation will ease to around 4% towards end of the third quarter.
Philippine annual inflation eased slightly to 8.6% in February from 8.7% in January, slowing for the first time in six months on lower transport and food prices, but remains well outside the 2%-4% target band for the year.
The Bangko Sentral ng Pilipinas has raised rates eight times for a total of 400 basis points since last year to curb inflation, bringing the overnight reverse repurchase facility rateto 6.0%, the highest since 2007.
Diokno said he would not be surprised if the central bank cut banks' reserve requirement ratio to a single-digit level from the current 12% before year-end.
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Published on March 20, 2023 2:52 PM (GMT+8)Last Updated on March 20, 2023 2:52 PM (GMT+8)
