Sat. Mar 25th, 2023

MANILA, Jan 10 (Reuters) – The Philippine central bank chief on Tuesday confirmed interest rates would likely need to rise a further 25 or 50 basis points at next month's policy meeting, though said pressure to match rate hikes by the U.S. Federal Reserve was waning.
"The pressure on us to match U.S. increases will be much lower," Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla told reporters. "The need for us doing large adjustments is no longer there."
With the BSP set to take further steps to help curb pressure on consumer prices, Medalla expects inflation to be within this year's 2%-4% target band by the second half.
Inflation will likely fall below the midpoint of the target range by end-2023 or early 2024, he said.
The BSP, which raised its benchmark interest rate (PHCBIR=ECI) by a total of 350 basis points last year, as inflation hit a 14-year high, will hold its first policy meeting of the year on Feb. 16.
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The central bank's main concerns, for now, are inflation and, to some extent, a strong dollar and Medalla said he could not rule out further rate hikes until inflation pressures ease.
"I will say I am not worried about the monetary policy reducing output. What I am worried about is we are late and there will be a greater sacrifice of output later on," he said.
Annual inflation soared to 8.1% in December (PHCPI=ECI), the highest since 2008, bringing the full-year average to 5.8%, outside the central bank's 2%-4% target range.
Still, Medalla said the economy remained strong despite the BSP's policy tightening, with pent-up domestic demand as pandemic restrictions have been eased likely to continue supporting growth.
The economy may grow by more than 6% this year, he said.
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U.S. labor costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed, giving the Federal Reserve a boost in its fight against inflation.
OTTAWA, Jan 31 (Reuters) – The Canadian economy grew by 0.1% in November, mostly on services-producing industries, Statistics Canada said on Tuesday. December GDP was most likely unchanged, while real industry GDP looks to increase by 0.4% in the fourth quarter, and a 3.8% increase for the year, the agency said in a flash estimate.
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