Analysts expect no change in BSP policy rates

📆 5/12/2024 10:43 PM
📰 PhilstarNews

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Monetary authorities are likely to keep borrowing costs unchanged as inflation turned out slower than expected and economic growth seems to hold up despite the high interest rate environment, analysts said.

Makoto Tsuchiya, economist at Oxford Economics, said the Bangko Sentral ng Pilipinas is likely to keep its policy rates steady at 6.50 percent when the policy-setting Monetary Board holds its scheduled meeting on Thursday.MANILA, Philippines —

Tsuchiya said Philippine inflation will likely average at 3.6 percent this year, but risks continue to cloud the outlook. This could prompt the central bank to stay on hold until the fourth quarter, when it could cut rates twice by 25 basis points. Aris Dacanay, economist for ASEAN at HSBC, said there is no pressure for the BSP to hike policy rates nor is it in a rush to start monetary easing.

The BSP will also not cut policy rates even if first-quarter gross domestic product growth came in weaker than expected at 5.7 percent year on year. For his part, UnionBank chief economist Ruben Carlo Asuncion said the Monetary Board would wait until El Niño effects have receded, local food supply has normalized, and rice inflation has narrowed before cutting borrowing costs.

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