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Monetary Policy Report
August 2024
Monetary Policy Summary Economic Outlook Current Developments Summary of MP Decisions Download Full Report
Articles
The Value of Silence in Central Bank Communications: Adopting a Quiet Period in the BSP Salient Prices in Consumer Expectations
BSP Survey of External Forecasters
Monetary Policy Summary
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The BSP decided to reduce its target reverse repurchase rate by 25 basis points to 6.25 percent during its monetary policy meeting on 15 August 2024. The BSP also lowered the interest rates on the overnight deposit and lending facilities to 5.75 percent and 6.75 percent, respectively. Read more

Economic Outlook
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Inflation is estimated to settle within the 2.0–4.0 percent target range over the policy horizon. Inflation will likely decline in August and September 2024 due to negative base effects from the previous year’s uptick in global oil and rice prices. Lower rice tariffs, the gradual arrival of rice imports, and a downtrend in global commodity prices will also contribute to the deceleration. Read more
Current Developments
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Headline inflation rose in July 2024, driven by higher food and energy costs. The higher July inflation stemmed from higher electricity rates and domestic petroleum prices. Inflation for education services also accelerated with the start of the school year. Food inflation climbed due to faster price increases for meat, fish, and corn, while rice inflation remained high. Read more
Summary of MP Decisions
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The Value of Silence in Central Bank Communications: Adopting a Quiet Period in the BSP
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As an inflation-targeting central bank, the Bangko Sentral ng Pilipinas (BSP) recognizes the importance of coherence and transparency in its monetary policy communications. Many central banks support the view that markets’ clear understanding of monetary policy objectives and strategies contributes to the effectiveness of monetary policy transmission through asset prices, credit, and expectations. Read more
Salient Prices in Consumer Expectations
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Households’ inflation expectations play a key role in inflation dynamics. Changes in household expectations influence their economic behavior. For instance, if consumers expect prices to rise, they might be induced to spend more today while they perceive prices to be relatively low. Consumer expectations could also influence wage negotiations, as consumers may bargain for higher wages to align their spending power with the projected prices of goods and services. Consequently, monetary authorities strive to ensure that households’ inflation expectations are well-anchored, considering that these are integral to achieving the central bank’s mandate of price stability. Read more
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