MANILA: The Philippines central bank may have to hike key interest rates by 75 basis points if the US Federal Reserve raises rates by that much, Bangko Sentral ng Pilipinas Governor Felipe Medalla said on Monday.

Medalla’s remarks follows Finance Secretary Benjamin Diokno’s statement that key rates should rise by 100 basis points before year-end.

The BSP has two more policy meetings left in 2022 and has so far raised key rates by 225 basis points (bps) this year, including an off-cycle 75 bps hike in July, to tame inflation and slow the peso’s decline.

Medalla said the BSP has hiked rates enough, putting it on a target consistent inflation path, and that there was a fighting chance of average inflation at 4% next year.

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The economy, he said, would survive the rate hikes and the BSP was committed to bringing inflation to within target range.

He said more can be done on the non-monetary side to support a struggling peso.

Foreign exchange volatility needed to be controlled, he added.