BSP raises interest rates for the second time this year

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THE Bangko Sentral ng Pilipinas (BSP) announced that the policy-making Monetary Board (MB) decided to raise interest rates again in order to curb inflation brought about by the increase in the prices of commodities.

Starting tomorrow, June 24, 2022, the BSP raised the overnight reverse repurchase rate by 25 basis points to 2.5 percent effective June 24, 2022.

Interest rates were first raised by 25 basis points last month.

According to Diokno, the interest rate for overnight deposit and lending facilities was increased to 2 percent and 3 percent, respectively.

The BSP explained that the key policy rate was raised in order to encourage banks to deposit with the BSP.

Diokno said forecasted inflation rose in 2022 perhaps due to the rise in prices of products globally, lack of fish supply in the country and the pending petition for a fare hike increase.

BSP Deputy Governor for Monetary and Economic Sector Francisco Dakila Jr. said that this year, inflation rate is seen to increase to 5 percent from the original 4.6 percent projection.

Dakila said inflation for the second half of the year may reach an average of 5.6 percent amid high commodity prices and other services.

Next year’s average inflation rate, on the other hand, is seen to reach 4.2 percent from a previous forecast of 3.9 percent.

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