The Bangko Sentral ng Pilipinas’ (BSP) policy-making arm, the Monetary Board, will meet only six times this year instead of the usual eight to allow the central bank more time to review and act on its monetary policy rate through a thorough assessment of relevant data.
BSP Deputy Governor Francisco G. Dakila Jr. said reducing the number of monetary policy meetings is a global trend among central banks.
He said in an earlier interview that fewer meetings allow more time to review inflation forecasts against growth and foreign exchange assumptions.
The Monetary Board conducts its policy meetings following the release of key economic indicators such as the monthly inflation report and the quarterly gross domestic product (GDP) performance.
This year, the Monetary Board will hold policy meetings on Feb. 20, April 3, June 19, Aug. 28, Oct. 9 and Dec. 11.
Last year, the Monetary Board met only seven times instead of eight. Before 2024, the BSP always had eight policy meetings annually, even during the 2020 Covid-19 pandemic.
In a statement, the BSP said the Monetary Board adjusted the frequency of its policy meetings to six per year starting in 2025, effectively setting bimonthly intervals for each policy rate review.
"(This) will enable more in-depth analysis of data updates and provide the BSP with greater scope for consultations with sector experts on its forecast assumptions," the BSP said.
The central bank has also set a more regular schedule for releasing the Monetary Policy Report (MPR) and highlights of the policy meetings.
Introduced in 2022, the MPR replaced the inflation quarterly report. The MPR also serves as forward guidance on the BSP’s monetary policy direction and offers a detailed analysis of the inflation outlook.
As an inflation-targeting central bank, the BSP uses forward guidance to convey its future monetary policy stance to markets, businesses and consumers.
The BSP typically applies all types of forward guidance to help calm markets. The Monetary Board has been known to give purely qualitative forward guidance, which comprises broad statements that provide an overview of the likely future path of monetary policy.
The BSP said that to effectively communicate its forward guidance, it must be transparent and consistent in its messaging and project a single voice to the public when communicating the intention and direction of monetary policy.