This week is going to be a little bit interesting, but we’re going to have to wait for that spice.
On Thursday the Bankgo Sentral ng Pilipinas (BSP), our central bank, will decide on what it will do (or not do) with respect to interest rates to address the persistent problem of inflation. The US Federal Reserve already decided to “skip” this round of rate raises, but indicated that they were not yet reversing course and could in fact foresee the need for two additional raises in 2023. How will the BSP respond to this situation?
Then, on Friday, Repower Development [REDC] will price its IPO. We might not hear about their decision until sometime over the weekend, as “pricing day” isn’t a hard deadline.
MB BOTTOM-LINE
For the interest rates issue, the same pressures are all still there in the system. Inflation appears to be cooling mathematically, but in absolute terms the consumer price index data shows that there’s been very little change in the general level of prices since January when infation was at its scariest. Granted, a huge part of what made January inflation scary was the velocity of the inflation – how quickly the prices were increasing – and we aren’t dealing with that now. Our current problem is that the inflation that we’ve experienced has become “sticky”, both here and around the world, and that the rate of price increases hasn’t come down as quickly as our bankers anticipated.
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