The government remains focused on containing inflation as high interest rates are dampening the country’s investment prospects, according to the National Economic and Development Authority .
“Interest rates implemented last year and early part of this year are going to [be felt] until the end of the year because there are usually long time lags, 6 months to 1 year. High interest rates are not good for investments, that’s pretty clear,” Balisacan told reporters on the sidelines of the recent banking reception for the BSP’s 30th anniversary.
Core inflation, which excludes volatile items in the Consumer Price Index, is an important measure of the rise in commodity prices. The Philippine Statistics Authority defined core inflation as measuring the “underlying trend or movement in the average consumer prices.” Should the United States Federal Reserve decide to increase their rates, Balisacan said the Philippine monetary authorities may also do the same.
Standard Chartered said it expects a 25-bps cut in key policy rates in December 2023 and another 50-bps cut between the first and third quarters of next year. This effort to reduce interest rates will help the country attract more investments.