aob slot
INQUIRER FILE PHOTO
The Bangko Sentral ng Pilipinas (BSP) is expected to deliver its final rate cut this year of 25 basis points (bp), despite the slightly faster inflation rate of 2.5 percent in November as price pressures remain manageable.
Four banking institutions polled by the Inquirer predicted that the Monetary Board, the highest policymaking body of the BSP, will continue easing and slash the benchmark rate for the third time this year once they convene for the last time this year on Dec. 19.
Article continues after this advertisementShould the projection materialize, the policy rate will then be reduced to 5.75 percent from 6 percent, which was the lowest since February 2023.
FEATURED STORIES BUSINESS BIZ BUZZ: Marcos bats for brown rice BUSINESS UK officially joins Indo-Pacific trade bloc BUSINESS Megaworld to launch 3 new townships in ’25 Benign inflationEmilio Neri Jr., senior vice president and lead economist at Bank of the Philippine Islands (BPI), said that while a pause or skip remains possible, recent economic data and external developments have aligned in favor of monetary easing.
“First, the inflation outlook for 2025 supports the case for a rate cut. Despite consumer prices rising at a faster pace in November, inflation remains well within the target,” Neri said.
Article continues after this advertisement“A slew of typhoons caused vegetable prices to soar, but falling prices of key items like rice have tempered overall price increases,” he added.
Article continues after this advertisementNeri also said that recent economic activity data have fallen short of government and analyst expectations, and that pressure on government officials to deliver a rate cut continues to build.
Article continues after this advertisementMeanwhile, China Banking Corp. cited that recent inflation prints have been at the lower end of the BSP’s 2 percent to 4 percent target range, estimating that inflation will remain firmly within target going forward.
“Furthermore, the Fed is also widely expected to lower its own policy rate by 25 bps next week, which should give the BSP more room to continue easing monetary policy,” Chinabank added.
Article continues after this advertisement Persistent risksAdditionally, Chinabank said the BSP would likely continue to signal a cautious approach to rate cuts, citing persistent risks and global uncertainties.
Metrobank likewise said that the rate cut would happen again amid “benign consumer prices.”
Its analysis penned by Maria Kaila Balite, the bank’s research officer, and research analyst Ezra Vidar, cited the start of a pickup in consumer and investment spending in the July to September period following the start of the BSP’s monetary easing cycle.
Japan pulled the plug on nuclear power after the 2011 Fukushima disaster, but with the G7’s dirtiest energy mix, it is seeking to cut emissions, and atomic energy is making a steady comeback, in part because of AI.
Google was pleased by federal judge James Donato’s decision to “temporarily pause the implementation of dangerous remedies demanded by Epic,” a company spokesperson said, as an appeals court considers permanently blocking the order stemming from Epic’s argument that the tech titan’s Android Play store is an illegal monopoly.
“Despite the improvements, growth is projected to still settle below the official government target of 6 percent to 6.5 percent for 2024,” the two said.
“Given this, and with inflation likely to remain within target, the BSP has room to continue its monetary easing to further stimulate consumption and investment expenditure and drive higher growth next year,” they added.
Subscribe to our daily newsletter
A forecast by Deepali Bhargava, ING Bank Philippines head of research for Asia-Pacificcgebet, also pointed to the same likely rate cut from the BSP this week. INQ
READ NEXT BSP poised to deliver final 25-bp rate cut in ʼ24 BIZ BUZZ: Marcos bats for brown rice EDITORS' PICK Maroons back as UAAP hoops kings Acop to Bato: Rebut report with proof, not theatrics PBA: Hong Kong Eastern escapes exhausted Ginebra UK officially joins Indo-Pacific trade bloc EDITORIAL: Crackdown on fake PWD cards Baby rescued from online child trafficking – PNP MOST READ PH, US air forces hold drill off Pacific coast Jamela Villanueva goes cryptic after Maris Racal-Anthony Jennings exposé SOS Network asks VP Duterte to explain use of confidential funds Acop to Dela Rosa: Rebut report with proof, not theatrics Follow @FMangosingINQ on Twitter --> View comments