MANILA – The Bangko Sentral ng Pilipinas has scope to resume its monetary policy easing in the first half, with inflation within target, a Fitch Solutions analyst said Friday.
The BSP cut the overnight borrowing rate by a total 75 basis points in 2019, which brought the benchmark back to 4 percent from 4.75 percent in 2018. The reserve requirement ratio or RRR for banks was lowered to 14 percent.
"With inflation remaining below the mid-point of the target range, I think there’s a bit of scope for the central bank to begin to ease again," Fitch Solutions Senior country risk analyst Michael Langham told ANC.
"We’re seeing credit growth slowing still in the later stages of 2019 so I think there’s still a bit of room as rates remain high as what they were before the rate-hiking cycle in 2018," he said.
The BSP could be more "cautious" in the second half with inflation seen to breach the 3-percent midpoint of its 2 to 4 percent goal, he said.