The Philippine central bank isn’t in a race to raise interest rates, incoming governor Nestor Espenilla said, despite economists’ predictions the country will be the first in Southeast Asia to do so.
“It’s not a race to raise interest rates,” Espenilla, 58, deputy governor in charge of bank supervision, said in an interview on Thursday. “Is it time to raise interest rates? We are reviewing the situation right now. Are we behind the curve? I don’t think so,” he said. Espenilla will take office in July for a 
six-year term.
Espenilla’s governorship comes at a challenging time. President Rodrigo Duterte has just placed the southern island of Mindanao under martial law, inflation pressure is rising as the economy grows more than 6%, and the peso is trading near a 10-year low. Economists predict the bank will raise rates from a record-low as early as next quarter, the first in Southeast Asia.
Inflation is expected to ease after peaking in the third quarter and price gains will average within the target range, Espenilla said in his office in Manila. Food prices and fuel and energy costs seem to be stabilising while the impact of possible changes to tax laws will be short-term, he said.
“Do we need to act based on that?” Espenilla said. “It would suggest we shouldn’t.”
Bangko Sentral ng Pilipinas will next meet on June 22 to decide on policy, the last under outgoing governor Amando TetangCo. The central bank targets price gains to average 2% to 4% from 2017 to 2020. Inflation held at 3.4% in April, matching the pace in March which was the fastest since 2014.




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