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Monetary Policy Report November 2023


Monetary Policy Summary
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At its monetary policy meeting on 16 November 2023, the BSP decided to keep the target overnight reverse repurchase (RRP) rate unchanged at 6.50 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were likewise maintained at 6 percent and 7 percent, respectively. Read more

Economic Outlook
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The emergence of new supply shocks and second-order effects resulted in the upward adjustment of the latest baseline forecasts from the August 2023 Monetary Policy Report (MPR). Inflation is projected to average at 6.0 percent for 2023 and 3.7 percent for 2024, higher relative to the previous round by 0.4 ppt for both years. The upward revisions in the forecasts were driven by higher-than expected inflation outturns, higher inflation nowcast over the near term, approved transport fare increase, impact of moderate El Niño weather conditions, and uptick in global crude oil prices. Meanwhile, the lower inflation forecast of 3.2 percent for 2025 reflects mainly the appreciation of the peso following negative base effects. Read more

Current Developments
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Headline inflation slows down in October 2023. Inflation eased to 4.9 percent in October 2023 from 6.1 percent in the previous month. This brought the y-t-d average to 6.4 percent which is above the National Government’s average inflation target range of 2-4 percent for the year. Inflation for the heavily weighted food and non-alcoholic beverages decelerated to 7 percent due to improvements in supply conditions, particularly for rice. Non-food inflation also moderated to 3.4 percent, driven by lower inflation for restaurants and accommodation services, as well as transport. Read more

Summary of MP Decisions
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