© Reuters. FILE PHOTO: Philippine Finance Secretary Benjamin Diokno speaks during an economic briefing following President Ferdinand Marcos Jr’s first State of the Nation Address, in Pasay City, Metro Manila, Philippines, July 26, 2022. REUTERS/Lisa Marie David
MANILA (Reuters) – Philippines Finance Secretary Benjamin Diokno said on Sunday he believed that the central bank was leaning towards a pause in interest rate rises at its next monetary policy meeting scheduled for May.
“Non-monetary measures to ease inflation could address the problem more effectively”, including those already adopted by fiscal authorities, Diokno said in a statement.
The Bangko Sentral ng Pilipinas’ decided on Thursday to continue fighting inflation with a rate increase, although at the slower pace of 25 basis points (bps) to 6.25%.
BSP Governor Felipe Medalla has said the central bank’s next policy decision move would depend largely on how consumer prices behave in the coming months.
The latest BSP rate increase brought to 425 bps the total tightening it has delivered since May, the full impact of which Diokno said had yet to be absorbed by the economy, considering that monetary policy often works with a long lag.
“In my view, the monetary authorities have done enough. And monetary policy is not the only game in town. Besides … monetary policy works with a long lag,” said Diokno, who sits as a member of the seven-man monetary board of the central bank.
(This story has been refiled to correct to ‘seven-man’, not ‘seven-month’, in paragraph 6)