BSP could raise policy rates to 2.75% by the end of 2022 – Fitch Ratings
The Bangko Sentral ng Pilipinas (BSP) could potentially raise the policy rate to 2.75% by the end of 2022 after determining how the economy would fare amid the COVID-19 pandemic, said credit rating agency Fitch Ratings.
In its Country Risk & Industry Research, Fitch stated that the country’s leaders are still “wary of bottlenecks in the supply of commodities” that may drive faster inflation.
Currently, inflation in the Philippines has remained above the BSP’s target of two to four per cent due to high prices of food and energy, the ongoing African swine fever, and disruptions from typhoons and lockdowns.
International shipping issues and oil price hikes are also pushing local energy prices up.
Fitch said that they expect the BSP to begin its hiking cycle due to the economic recovery and growing market investor pressures, “with a gradual hiking cycle through 2022 … taking it to 2.75 percent by year-end.”
