BSP tracks Fed’s next move, but inflation data watched

By Cai U. Ordinario @caiordinario

THE Bangko Sentral ng Pili - pinas (BSP) expects the United States Federal Reserve to do two more increases in interest rates before pausing, which will be considered in its next policy rate meeting.

However, BSP Deputy Governor Francisco Dakila Jr. stressed that other data will be considered such as the rate of inflation and the growth of the Philippine economy.

Nonetheless, Dakila said, the BSP still believes inflation would continue to slow to 2.9 percent next year, which is within the target range of 2 percent to 4 percent.

“The environment today is very different from what we saw in the third quarter of last year when the Fed was just beginning to undertake a series of very aggressive policy actions. And right now, the market is seeing that perhaps, the Fed will do two more before pausing,” Dakila said.

“It’s a different situation with respect to the Fed, and very importantly, it’s a different situation with respect to the outlook on inflation for us, for the Philippines,” he added.

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FINANCE Secretary Ben -

Tuesday said he is amenable to hiking the government’s budget deficit ceiling if it is “necessary” to sustain the government’s infrastructure programs and projects.

This, as he disclosed that the national government must continue to build infrastructure for the next 20 years.

Diokno expressed openness to increase the budget deficit ceiling of the national government if it is in line with the goal of sustaining the country’s infrastructure projects.

“I think once you start a project, you’ve got to make sure that you finish that project, okay. And therefore, when you make a plan, it’s not going to be a straight line because there will be some adjustments along the way, and so I’m willing to maybe increase the deficit, if necessary, as long as we can continue our infrastructure projects,” he said during the Post-State of the Nation Address Philippine Economic Briefing on Tuesday.

Diokno was asked on how

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