On August 20, the Bangko Sentral ng Pilipinas (BSP) has indicated that it sees no immediate need to alter its monetary policy, maintaining interest rates at 6.25% as economic growth in the Philippines slowed for a third consecutive quarter. BSP governor Eli Remolona stated that the recent growth decline was unexpected but believes the economy will recover momentum.
"The slowdown in second-quarter growth was “a cause for concern because it was not expected," Remolona said.
The monetary policy stance of the Philippine central bank remains unchanged, as indicated by its governor on Thursday (August 10th), despite a consecutive deceleration in economic expansion during the second quarter spanning April to June. The Bangko Sentral ng Pilipinas (BSP), having previously implemented nine adjustments to its interest rates totaling 425 basis points to counteract inflation, has maintained a stable interest rate of 6.25 percent in its most recent pair of meetings.
In response to inquiries about the potential for sustained rate retention, BSP governor Eli Remolona conveyed to Reuters, "Such a prospect is feasible." He remarked that the deceleration observed in the growth of the second quarter was an "unexpected factor of worry," yet he appended that he envisions the economy reacquiring its impetus.
According to government data, the Philippines' gross domestic product experienced a 4.3 percent expansion in the quarter culminating in June, representing its most sluggish growth manifestation in almost a dozen years. This slump can be attributed to a reduction in public expenditure, elevated inflation rates, and escalated borrowing expenses. Economic tightening measures are anticipated to steer inflation back into the target range by the fourth quarter, a rationale which, as disclosed by Remolona to legislators earlier on the same day, justifies a cautious hiatus. The inflation rate for the seven months through July stood at 6.8 percent, significantly surpassing the central bank's yearly target bracket of 2-4 percent.
