MANILA (Reuters) – The Philippine central bank will consider not just recent inflation data but all potential drivers of future inflation when it reviews monetary policy next week, its governor said on Wednesday.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla made the statement when asked by a reporter whether another interest rate hike is on the table at the June 21 meeting.
“It’s a fairly complex environment that we need to navigate,” he said.
The BSP increased its policy rates by 25 basis points on May 10, the first hike in more than three years, to tame price pressures and manage inflation expectations.
Inflation picked up further in May, bringing the average rate in the first five months of the year to 4.1 percent, outside the central bank’s 2-4 percent comfort range.
“Recent developments on inflation and economic activity are key inputs but these are certainly not the only consideration,” Espenilla told reporters.
“We’ll be examining closely all the potential drivers of future inflation through the various transmission channels as affected by global developments, expectations formation, and uncertainty,” he added.
Espenilla’s remarks came as the Philippine peso <PHP=PDSP> lost more ground against the U.S. dollar on Wednesday, hitting its weakest level since June 2006.
The greenback strengthened against major currencies such as the yen and the euro ahead of the Federal Reserve’s policy meeting.
(Reporting by Enrico dela Cruz)