MANILA – The Bangko Sentral ng Pilipinas is likely to keep interest rates steady next week, even as cooling inflation gives its new chief, Governor Benjamin Diokno, "a lot more scope" to ease policy, an economist said Friday.
A 100-basis point cut in the benchmark borrowing rate and a 200-basis point reduction in the reserve ratio requirement for banks can help spur growth in the economy, said Standard Chartered Asia economist Chidu Narayanan.
"We think that the BSP will still hold at its meeting next meeting but signal that there will be potentially more rate cuts especially with inflation giving up a lot more scope for rate cuts," Narayanan told ANC's Market Edge.
Inflation slowed to 3.8 percent in February, returning to the BSP's 2 to 4 percent target.
Easing inflation could prompt Diokno to "accelerate" the pace of policy easing to support growth amid easing inflation, HSBC economist Noelan Arbis earlier said.