Ex-BSP officials urge 'jumbo' rate hike as inflation surge tests central bank credibility
Former Philippine central bank officials are advocating for a 50-basis-point interest rate hike to combat rising inflation. They argue that aggressive monetary action is necessary to anchor inflation expectations, despite acknowledging the limitations of policy in addressing supply-side issues.
Why it matters
The debate over 'jumbo' rate hikes underscores the challenges central banks face in balancing economic growth with price stability during inflationary periods.
Manila Bulletin - Ex-BSP officials urge ‘jumbo’ rate hike as inflation surge tests central bank credibility
Ex-BSP officials urge 'jumbo' rate hike as inflation surge tests central bank credibility
Former Bangko Sentral ng Pilipinas (BSP) officials said the central bank should seriously consider a large 50-basis-point hike in key borrowing costs to quell surging inflation, but also cautioned against the limits of inflation targeting as a policy tool.
Former Bangko Sentral ng Pilipinas (BSP) officials said the central bank should seriously consider a large 50-basis-point (bp) hike in key borrowing costs to quell surging inflation, but also cautioned against the limits of inflation targeting as a policy tool.
Diwa Guinigundo and Wilhelmina Mañalac, country analysts for the Philippines at New York-based GlobalSource Partners, wrote in an Oct. 20 commentary that the policy-setting Monetary Board (MB) should consider raising the benchmark lending rate through a “jumbo” hike.
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