© Reuters. Philippine Finance Secretary Benjamin Diokno speaks during an economic briefing following President Ferdinand Marcos Jr’s first State of the Nation Address, in Pasay City, Metro Manila, Philippines, July 26, 2022. REUTERS/Lisa Marie David/File Photo
MANILA (Reuters) – The Philippines’ finance minister said monetary authorities have room to pause on rate hikes in August despite a recent policy tightening by the U.S. Federal Reserve.
“I do not think we have to match. That is my view and we have to monitor other indicators like inflation,” Finance Secretary Benjamin Diokno told reporters on Friday during his weekly media briefing. His comments were embargoed until Monday.
Diokno sits in the policy-making Monetary Board that will meet on Aug. 17 to set the central bank’s benchmark rate that stands at 6.25% following a total of 425 basis points hikes since May last year.
The Monetary Board has four current members, including the central bank governor, but three seats are still vacant.
Inflation is expected to return to within the central bank’s 2% to 4% target range in the fourth quarter, Diokno said.
Headline inflation eased for a fifth straight month at 5.4% in June. First half inflation stood at 7.2%.
On Friday, Bangko Sentral ng Pilipinas Governor Eli Remolona said it is too soon to declare victory in the battle to curb consumer price pressures amid high core inflation and persistent upside risks.
“We will look at all the numbers. We are data dependent,” Diokno said, adding that authorities will take stock of the Fed rate hike’s impact on both global and domestic economy.
The Fed delivered a quarter-percentage-point rate increase, as expected, on July 26, and has not ruled out raising rates further if data warranted.