{
  "id": 926480,
  "title": "‘BSP sees less need for aggressive rate hikes’",
  "url": "https://urgent.news/2026/08/14/bsp-sees-less-need-for-aggressive-rate-hikes",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-14T16:00:00.000Z",
  "source": {
    "name": "Philippine Star Business",
    "slug": "philippine-star-business",
    "url": "https://www.philstar.com/business/2026/08/15/2549290/bsp-sees-less-need-aggressive-rate-hikes"
  },
  "original_language": "en",
  "account": "The Bangko Sentral ng Pilipinas (BSP) can afford to be less aggressive in increasing interest rates as economic growth remains below its potential, according to BSP Governor Eli Remolona Jr. Speaking at the 2026 Economic Journalists Association of the Philippines (EJAP) Economic Forum, Remolona highlighted that the widening gap between actual and potential growth has become a crucial factor in monetary policy decisions alongside high inflation. He explained that a negative output gap signals the need for a more cautious approach when raising the policy rate to combat inflation. Remolona estimated the economy's potential growth to be around five to six percent, which is significantly higher than the 2.3 percent growth recorded in the second quarter. However, he did not provide a definitive answer on whether the weaker growth outlook would lead to a pause at the Monetary Board's next meeting on August 27. Despite the recent easing in headline inflation, which slowed to 6.2 percent in July from a peak of 7.2 percent earlier in the year, Remolona emphasized that the BSP is not prepared to declare victory over inflation just yet. He stated that more convincing evidence of declining inflation is required before the central bank can relax its stance. Remolona attributed much of the recent inflation surge to global supply shocks, particularly higher energy and food prices due to the Middle East conflict. While the BSP has limited direct control over global supply shocks, he noted that monetary policy can help mitigate the second-round effects of higher energy and food costs spreading to other goods and services. When asked if the combination of weak growth and elevated inflation constituted stagflation, Remolona rejected the term, clarifying that while the economy is still growing below potential, it does not meet the definition of stagflation, which typically involves negative growth. The BSP has raised its benchmark policy rate by 50 basis points this year, raising the key interest rate to 4.75 percent after consecutive 25-basis-point hikes in April and June. The Monetary Board will convene again on August 27 to discuss the policy.",
  "summary": "The Bangko Sentral ng Pilipinas can afford to be less aggressive in raising interest rates as economic growth remains below potential, but policymakers still need to see a more convincing decline in inflation before relaxing their stance, BSP Governor Eli Remolona Jr. said.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}