Philippine Central Bank Braces for Severe El Niño and Oil Shock
The central bank is weighing weather and oil risks as inflation rises, while an HSBC economist expects two more rate increases.
Key takeaways
- Philippine inflation rose to 7.2% in September, according to the statistics agency.
- The central bank is factoring oil prices and El Niño severity into policy scenarios.
The Philippine central bank is preparing for a severe El Niño alongside a prolonged oil shock as inflation climbs. Governor Eli Remolona said the bank is using policy scenarios that account for oil prices and the weather event’s severity.
Inflation rose to 7.2% in September from 6.1% in August, while rice prices increased 18%, according to the Philippine Statistics Authority. Remolona said the impact on prices is expected from November through February.
The Bangko Sentral ng Pilipinas raised its benchmark rate by 25 basis points to 5% in August. HSBC economist Aris Dacanay expects another quarter-point increase next week and one more in December.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
