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Central Banks

Philippines Signals More Rate Hikes, FX Moves to Defend Peso

  • Recent peso volatility spurred stronger intervention: Medalla
  • Off-cycle hike not a main scenario but not off the table
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WATCH: Philippine central bank Governor Felipe Medalla discusses monetary policy, the economy and the local currency.Source: Bloomberg
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The Philippine central bank is considering stronger interventions and curbing excess peso liquidity to stem currency losses, as it signaled more rate hikes depending on the Federal Reserve’s action.

“Strong dollar is requiring us to have bigger policy rate increases,” Governor Felipe Medalla said in an interview from New York with Bloomberg Television’s Shery Ahn and David Ingles hours after delivering a half-point increase. “If not for the effect of the Fed policy on the peso, we would have been doing 25 (basis points) instead of 50,” he said referring to Thursday’s hike.