By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.
MANILA, Philippines — With war-related price shocks fueling price hikes, the Philippines may have little choice but to lean on higher interest rates to control inflation, as the government lacks the fiscal room for costly subsidies or sweeping price controls, Capital Economics said.
In a note to clients, Gareth Leather, senior Asia economist at Capital Economics, said the Philippines was among the economies that have allowed higher fuel prices to pass through to consumers as a limited fiscal space constrained the government’s ability to tackle the supply shock.
As a result, Leather noted that the Philippines had to raise interest rates to tame inflation, joining Pakistan and Singapore in tightening monetary policy.
READ: Jumbo rate hikes seen despite anemic growth
