MANILA, Sept. 21 (Xinhua) -- The Philippine central bank on Thursday decided to revise its inflation forecast for the coming years amid a higher inflation path, and retain the interest rate on the overnight reverse repurchase facility at 6.25 percent.
Average inflation in the Philippines is now seen to reach 5.8 percent in 2023 from 5.6 percent previously, while the forecast for 2024 likewise rose to 3.5 percent from 3.3 percent. For 2025, the forecast is unchanged at 3.4 percent.
"The upward adjustments in the 2023 and 2024 projections reflect the spillovers from weather disturbances, rising global crude oil prices, and the recent depreciation of the peso," said Eli Remolona, Governor of Bangko Sentral ng Pilipinas (BSP).
"Latest Bangko Sentral ng Pilipinas baseline projections show a slightly higher inflation path," Remolona said. However, he believed that inflation is still projected to revert to the 2 to 4 percent target range by the fourth quarter of 2023 without further supply-side shocks.
He said the Monetary Board noted that recent indicators of domestic economic activity pointed to waning pent-up demand, even as the impact of prior monetary policy tightening continues to weigh on credit.
Asked if the rate cuts are off the table this year, Remolona said "the rate cuts this year, 2023, are off the table, but rate hikes are not off the table."