BSP says first rate cut may come in Q4 of this year

April 17, 2024 - 11:36 AM
Philippine peso bills
A man counting Philippine peso. (The STAR/KJ Rosales)

 The Philippine central bank is not in a hurry to ease monetary policy rates with the first rate cut likely to happen in the fourth quarter of 2024 or the first quarter of next year, its governor said on Wednesday.

“We have plenty of time. I would say the central scenario would be fourth quarter we ease. If things are worse, then we might postpone to first quarter 2025,” Bangko Sentral ng Pilipinas Governor Eli Remolona told reporters on Wednesday.

The Philippine central bank kept its benchmark rate PHCBIR=ECI steady at 6.50% for a fourth straight meeting on April 8 and Remolona said he was not contemplating a resumption of rate hikes.

Annual inflation quickened for second straight month in March to 3.7% from the previous month’s 3.4%, prompting the central bank to raise its risk-adjusted consumer price forecast to 4.0% for 2024 from 3.9% previously.

Remolona also said the weakness in the peso “has not been large enough to affect inflation expectations.”

The peso is down 2.83% against the dollar so far this year.

“It is not a case of a weak peso, it is a case of a strong dollar,” Remolona said.

— Reporting by Neil Jerome Morales; Editing by John Mair