MANILA -- Nomura Chief ASEAN Economist Euben Paracuelles said the Bangko Sentral ng Pilipinas still can 'very much afford to be patient' when it comes to holding the country's interest rates steady.

In an interview on ANC's Market Edge, Paracuelles said this is because he sees the Philippine economy staying resilient this year.

"Growth last year was below 6 [percent] but actually from (the fourth quarter), if you look beyond the headline, there’s some resilience to domestic demand, particularly private consumption--which I thought earlier that because of high inflation, high interest rates, sentiment’s gonna be weak, it’s gonna hold back household spending," he said.

"But that wasn’t really the case," he noted.

Paracuelles said he has upgraded his 2024 full-year economic growth forecast for the Philippines to 6 percent, from his initial 5.8 percent estimate and also faster than the actual 5.6 percent gross domestic product growth in 2023.

Philippine economy grows 5.6 pct in 2023, below gov't target

"I think for the next several months they will be on hold," Paracuelles said of the BSP, noting their expectation of an inflation uptick in the second quarter due to base effects.

Inflation eases to 2.8 percent in January

"If that’s the case in the very near term I think it’s very difficult to see BSP starting to sound more dovish and signal a rate cut so I still have them cutting only in August," he said.

"And from there maybe a total of 100 bps this year, plus another 50 next year, so a total of 150 bps to take the policy rate to 5 percent," he said.

--ANC, 16 February 2024