On eve of policy review, BSP says ready to tweak rates ‘as necessary’

MANILA, Philippines — Ahead of the Bangko Sentral ng Pilipinas’ policy review, its governor on Tuesday assured the public that monetary authorities are prepared to adjust key rates anew to curb rising commodity prices.

Speaking at an economic briefing in Tokyo, BSP Governor Nestor Espenilla said the central bank “stand[s] ready to adjust further as may be necessary” to rein in inflation.

"We stand ready to timely adjust our policy settings to achieve our inflation target," Espenilla remarked.

Inflation spiked 4.6 percent in May, outpacing the 4.5 percent print in April but lower than market estimates of 4.9 percent.

The May inflation rate was the highest in five years and was above the central bank’s 2-4 percent target range. Year-to-date, inflation averaged 4.1 percent.

For the first time in nearly four years, the BSP last month lifted key rates to tame rising consumer prices.

But Espenilla had said inflation outlook “continues to be a concern and requires close attention" while some economists say the BSP will likely undertake further policy action this year as inflation heats up.

The BSP is scheduled to hold its next rate-setting meeting on June 20, a day earlier than the regular policy reviews done every six weeks.

Last week, the BSP chief said monetary authorities—who are now facing a “fairly complex environment”—will look into “a very rich and broad range of information” at the central bank meeting on Wednesday, including potential drivers of future inflation.

During the same event in Tokyo, Espenilla likewise stressed that the BSP is on guard to “prevent excessive peso volatility,” adding that peso exchange rate flexibility “promotes self-correcting mechanisms.”

The local currency extended its losing streak to six trading sessions, shedding another 21 centavos to close at a fresh 12-year low on Monday after piercing the 53 to $1 mark last week.