MANILA (Reuters) – The Philippines central bank will likely have to continue raising rates at its next two meetings to ensure inflation returns to within its 2-4% target range next year, its governor said on Friday.
Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said the likelihood that the central bank will not increase its policy rates at upcoming meetings was “extremely low.”
The central bank expects inflation, currently running at a 14-year high of 8%, to be back within the 2-4% range in the second half of next year.
“We have to do more to make sure that happens,” Medalla told Bloomberg TV.
Philippine monetary authorities on Thursday raised the overnight reverse repurchase facility rate to 5.50%, the seventh rate hike this year. The rate-setting meeting takes place every six weeks.
The BSP on Friday announced an inflation target of 2% to 4% to 2025 and 2026, same as its band for 2023 and 2024.
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Retaining the targets “underpins the BSP’s commitment to take all necessary action to bring inflation to a target-consistent path in the medium term,” the central bank said in a statement.
(Reporting by Neil Jerome Morales and Karen Lema; Editing by Kanupriya Kapoor and Ed Davies)