The Bangko Sentral ng Pilipinas (BSP) is likely to increase its key policy rates by 50 basis points in December and another 25 basis points next year, said finance and insurance firm Fitch Solutions.
So far, the BSP raised interest rates by 300 basis points this year, bringing the benchmark interest rate to a 14-year high of five per cent.
Just last Thursday, the central bank delivered an aggressive 75-basis-point rate increase as it committed to match the rate hikes of the US Federal Reserve point by point to maintain a healthy 100 basis points interest rate differential.
Fitch Solutions stated that they are expecting the benchmark policy rate to be hiked further to 5.50% in 2022 before peaking at 5.75%in 2023 as BSP battles high domestic inflation.
The firm added that a stabilization in global monetary conditions and headwinds to economic growth would likely cause the pace of hikes to slow in the coming months.
Meanwhile, the research arm of the Fitch Group sees inflation averaging 5.8% this year before moderating slightly to 4.8% next year, both above the BSP’s two to four per cent target range.