THE Philippines’ high exposure to inflation risks could prompt the central bank to tighten its monetary policy further despite its weak growth prospects, Oxford Economics said.
In a report dated Aug. 11, the United Kingdom-based think tank said the Bangko Sentral ng Pilipinas (BSP) could still deliver an additional 50 basis points (bps) in rate hikes to 5.25% this year.
This comes even as they see most central banks in emerging markets pausing amid persistent uncertainty arising from the Middle East war.
“We expect most central banks will keep rates on hold as uncertainty regarding the Middle East conflict lingers,” Oxford Economics Lead Economist Maya Senussi said. “We only forecast additional hikes in the Czech Republic, India, Indonesia, the Philippines, and South Africa.”
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