Higher gasoline, diesel pump prices set today

BSP expected to implement more rate hikes due to elevated inflation: Fitch

The Bangko Sentral ng Pilipinas is seen to continue hiking the country’s key policy rate in the first half of 2023 due to the elevated inflation, Fitch Solutions said on Monday.

In a statement, Fitch Solutions said it expects the central bank to implement a 50 basis points hike in its next meeting in May, following a 50 bps hike last Feb. 16.

Fitch Solutions said interest rates in the Philippines could peak at 6.50 percent this year, higher than its initial estimate of 6 percent.

The country’s benchmark interest rate, used by banks to price loans, is now at 6 percent. It was raised by a cumulative 400 bps since last year.

“The latest decisions were mainly driven by concerns over persistently high inflation, and we think that the BSP’s tightening will continue into H123 it does not carry. to tame inflationary pressures,” Fitch Solutions said.

Oil firms on Monday announced another round of hikes in pump prices of gasoline and diesel, while rolling back that of kerosene.

“Beyond that however, a stabilization in global monetary conditions and headwinds to economic growth will give the BSP enough reason to leave rates on hold throughout the remainder of 2023,” it added.

Inflation hit a fresh 14year high in January 2023 to 8.7 percent, beating expectations. January’s consumer price index is also more than double the government’s 2 to 4 percent target range. This was due to higher housing, water and power costs as well as the continued increase in select food prices including vegetables.

Risks to the policy rate forecast include the larger-than-expected rate hikes by the US Federal Reserve which could exacerbate peso volatility and if inflation remains “stubbornly

In separate advisories, Chevron Philippines Inc. (Caltex), Pilipinas Shell Petroleum Corp., and Seaoil Philippines Corp. said they will hike prices per liter of gasoline by P0.90, and diesel by P1.05, while rolling back kerosene by P0.25.

Cleanfuel will implement the same changes, excluding kerosene which

The changes will take effect at 6 a.m. on Tuesday, February 21, for all the firms except for Caltex which will adjust prices at 12:01 a.m. and Cleanfuel at 4:01 p.m. the same day.

Oil firms last week cut down prices per liter of diesel by P2.20 and kerosene by P2.50, while keeping gasoline prices unchanged.

Latest data available from the DOE show that year-to-date net decreases stand at P2.15 per liter for diesel and P0.25 per liter for kerosene, while gasoline remains at a net increase of P5.10 per liter.