‘Good chance’ for BSP to pause rate hikes later this year: analyst

The Bangko Sentral ng Pilipinas may pause its interest rate hiking streak as the US Federal Reserve signaled to do the same later this year, an analyst said Friday.

BSP Gov. Felipe Medalla on Thursday announced another 25 basis point hike, which brought the benchmark policy rate to 6.25 percent. 

"Maintaining perhaps an appropriate interest rate differential that helps to temper capital flow volatility in and out of the Philippines to stabilize the peso, that also is a key tool towards actually managing inflation,” Moody’s Investor Service SVP of Sovereign Risk Group Christian De Guzman told ANC.

“Given our view that the Fed will start to pause later this year, there is also a good chance that the Philippines might also do the same,” he said. 

He said keeping the peso stable is also key to managing inflation.

Moody’s Investor Service also earlier lowered it gross domestic product growth outlook for the country to 5.7 percent from 7.1 percent in 2023.

• How to cope with or take advantage of higher interest rates
• US Fed lifts key interest rate amid banking sector fears
• Bangko Sentral hikes benchmark by 25 bps to 6.25 percent