Asia's Top Inflation-Targeting Bank May Be Preparing to Hike

Philippine central bank met its inflation target six times
Economists predict BSP may raise interest rates next year

Shoppers and pedestrians walk past stalls at Quiapo Market in Manila, the Philippines, on Sunday, Feb. 5, 2017. The Philippines is scheduled to release consumer price index (CPI) figures on Feb. 7.Photographer: Taylor Weidman/Bloomberg

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By Karl Lester Yap

December 13, 2017 at 4:05 AM UTC

Updated on

December 13, 2017 at 6:33 AM UTC

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A small economy that’s constantly battling risks beyond its control like typhoons and oil prices has been one of the most successful in managing inflation in Asia.

The Philippine central bank, which has an annual inflation target that’s currently set at 2 percent to 4 percent, met its goal six times in the past eight years and the two times it failed were because prices were too low. That was a better outcome than other inflation-targeting banks in Asia, namely Indonesia, Thailand, and South Korea, according to data compiled by Bloomberg. Japan and India adopted formal targets more recently, while in China, the government sets the goal.