© Reuters. FILE PHOTO: Bangko Sentral ng Pilipinas Governor Felipe Medalla poses for a photograph in his office at Manila, Philippines, November 18, 2022. REUTERS/Eloisa Lopez/File Photo
MANILA (Reuters) – The Philippine central bank will hike interest rates this month, though the monetary board is likely to be split over whether to raise the policy rate by 25 or 50 basis points, its governor said on Friday in an interview with Bloomberg TV.
Felipe Medalla expressed relief that the U.S. Federal Reserve was likely to scale back its interest rate hikes. On Tuesday, he said the BSP could pause policy tightening by the first quarter next year barring “no major shocks”.
“Certainly we will not do zero and I cannot speak for the rest of the board. But I think the board members will probably be split between whether doing 25 or 50,” he said.
Medalla heads the seven-member monetary board, which will review the BSP’s interest rate settings on Dec. 15 in its last policy meeting of the year.
The BSP has increased its benchmark interest rates by a cumulative 300 basis points since May to battle inflation.
When asked if he thinks the BSP’s key rates will peak in the first half of 2023, Medalla replied: “Yes”.
Fed Chair Jerome Powell on Wednesday said it was time to slow the pace of coming rate hikes, ahead of the U.S. central bank’s Dec. 13-14 meeting, at which a half-point increase is widely expected.