Finance Secretary Benjamin E. Diokno said the impact of high-interest rates on the economy will be manageable and wants the Bangko Sentral ng Pilipinas (BSP) to take a pause in its series of monetary tightening due to easing inflation. During Diokno’s weekly Chat with SBED briefing, the finance chief said the government’s 6.0 percent to 7.0 percent growth target for this year already took into account the nine to 18-month log effect of the BSP’s interest rate-hiking cycle. While the real-world impacts of higher interest rates were not yet fully felt in the first quarter, Diokno has expressed confidence that the gross domestic product (GDP) from second to fourth quarters would not take a substantial hit. Finance Undersecretary Zeno Ronald E. Abenoja said the primary impact of the BSP’s 425 basis points hiked in the benchmark interest rate will be on inflation expectations. “Maybe it will be on inflation expectations, which is the aim of the 425 basis points increase. But at the same time, we recognize that there could be a hit on real economic activity, but it’s manageable, as the secretary has mentioned,” Abenoja said. The central bank has been raising its key policy rates since May last year, which now stands at 6.25 percent, the highest in nearly 16 years. Headline inflation, on the other hand, eased to 6.6 percent in April, but core inflation remained stubbornly high at 7.9 percent. The slowing consumer prices signaled that the central bank may now pause in raising policy rates. Diokno, who is also a member of the Monetary Board, sees no reason for the BSP to hike interest rates further. When asked about the impact of additional monetary tightening this year, Diokno said “Why are we talking further rate hikes, who’s doing the rate hikes? We’re not thinking of further rate hikes." He further stated that “Yes, I’m for a pause, that’s my opinion.” “Inflation is going down, we have huge foreign reserves, while the current account deficit has expanded, it’s financially manageable and that’s because of the improved economy, plus infrastructure spending,” the finance chief and former BSP governor noted. “So overall, there’s no reason why we should increase the rates,” Diokno pointed out. Last March, Diokno supported the case for the BSP to consider a pause in its monetary tightening cycle.