MANILA - The Philippine central bank is considering an off-cycle interest rate hike before its next scheduled policy meeting on June 18, Governor Eli Remolona said Friday.
In an interview with One News, Remolona stated that the 25-basis-point rate increase in April "didn't seem enough" to counter the "big and persistent supply shock" affecting the economy.
"It's a toss-up whether we do an off-cycle, or we just wait for the regular meeting," Remolona said.
The Bangko Sentral ng Pilipinas raised its key rate to 4.50% in April to combat inflation, driven by spiraling fuel costs that could lead to price hikes on other consumer goods. The central bank held an off-cycle meeting on March 26, becoming the first in Asia to do so amid concerns over the Middle East conflict's impact on growth and inflation.
The Philippine peso has weakened about 4.6% against the dollar, breaching the 60-peso level, according to LSEG data. Indonesia also announced a surprise 50-basis-point hike on Wednesday to support the rupiah at record lows, while tightening control over commodity exports.
India, Indonesia, and the Philippines are particularly vulnerable to Middle East disruptions as oil importers, also suffering capital outflows. "Whatever we do, we want to convey the message that we're trying to be proactive," Remolona emphasized. "We're trying to stay ahead of the curve and that we're serious about inflation."