Finance secretary says interest rates may be higher for longer

March 22, 2024 - 9:11 AM
File photo of Rep. Ralph Recto (Ralph Recto/Facebook)

 Philippine Finance Secretary Ralph Recto said on Thursday interest rates may stay “higher for longer”, but could see the first cut this year.

Recto, who has a seat as government representative to the central bank’s monetary board, added however the expected rate cut could be “less than previously thought” in terms of magnitude and frequency. He said interest rates could be cut by up to 200 basis points in the next two years.

The central bank, which kept its benchmark rate steady at 6.50% for a third straight meeting in February, next meets on April 4 to review policy.

Recto also added that 6.0% economic growth this year is realistic.

The Philippine economy grew 5.6% last year, one of the fastest growing economies in Asia, even as the government missed its 6.0%-7.0% target for the year.

The Philippine government’s 6.5%-7.5% growth target for 2024 will be reviewed by economic officials on Friday.

— Reporting by Neil Jerome Morales; Editing by Kanupriya Kapoor