Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. has expressed openness to the possibility of an off-cycle rate hike, contingent upon key economic indicators, particularly September’s inflation figures.
In his assessment of the situation, Remolona underscored the critical importance of forthcoming data, including the October 5 release of the consumer price index (CPI) for September. However, he emphasized that a singular data point would not be the sole basis for a policy shift.
The BSP’s report on September 29 suggested a range of possibilities for the September CPI, spanning from a continuation of August’s 5.3 percent rate to a four-month peak of 6.1 percent.
The central bank is awaiting the release of the September CPI on October 5 and the third-quarter gross domestic product (GDP) growth rate, scheduled for November 8, before making any decisions regarding an off-cycle rate adjustment.
With advance access to this pivotal data, the BSP retains the flexibility to act outside of its regularly scheduled policy meetings, which are slated for October 5 and immediately after November 8.
Market analysts anticipate a slight increase in third-quarter GDP compared to the previous quarter, with a few forecasting growth of 5.2 percent for the July to September period—still below the government’s projection of six percent to seven percent.
The BSP’s Monetary Board has only two policy meetings left this year, scheduled for November 16 and December 14.
Remolona hinted last week that an off-cycle target reverse repurchase (RRP) rate adjustment is a “possibility.”