BSP done with rate hikes: Fitch unit | ABS-CBN

ADVERTISEMENT

dpo-dps-seal
Welcome, Kapamilya! We use cookies to improve your browsing experience. Continuing to use this site means you agree to our use of cookies. Tell me more!

Business

BSP done with rate hikes: Fitch unit

BSP done with rate hikes: Fitch unit

ABS-CBN News

Clipboard

MANILA -- The Bangko Sentral ng Pilipinas (BSP) is done with hiking interest rates, a subsidiary of Fitch Solutions said Monday.

"We think that the Philippine hiking cycle has finally concluded following the BSP's meeting on December 14," according to BMI.

The BSP kept the country’s benchmark target reverse repurchase rate (RRP) steady at 6.5 percent in December--the second consecutive pause after an off-cycle 25 basis points (bps) hike back in October.

In a brief, BMI said easing price pressures reduce the need for the BSP to lean towards fresh hikes to anchor inflation expectations.

ADVERTISEMENT

BMI said inflation is easing more rapidly than they predicted. Inflation slowed to 3.9 percent in December 2023.

"We believe this downward trend will persist, and project that inflation will average 3.9 percent in 2024. If we are right, inflation will pose a diminishing concern in the ensuing months," BMI said.

BMI also said they expect the BSP to only cut rates in the second half of 2024, in line with their expectations for the United States Federal Reserve to restrict rate cuts to this period.

"A pre-emptive return to monetary loosening could not only de-anchor inflation expectations but also weaken the Philippine peso," BMI said.

BMI also said that Philippine economic growth rates may reduce the urgency for the BSP to lower interest rates.

"2024 is set to be a stellar year and we forecast the economy to expand by 6.2 percent," the firm said.

In November, BMI said they see the Philippine economy growing 5.7 percent in 2023.

RELATED STORY:

Watch more News on iWantTFC

ADVERTISEMENT

ADVERTISEMENT

It looks like you’re using an ad blocker

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker on our website.

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker on our website.