Philippine Finance Secretary Benjamin Diokno estimates that the central bank can cut its benchmark interest rate by a total of 100 basis points this year as inflation cools to within the 2%-4% target.
Bangko Sentral ng Pilipinas’s target reverse repurchase rate may fall to 5.5% by the end of the year from the current 6.5%, Mr. Diokno told Bloomberg Television on Monday. Monetary easing may start at the second half, said the finance chief who sits in the policymaking Monetary Board.
“A 75-basis-point cut by the Fed this year could actually be matched by the central bank or it could be even 100 basis points,” Mr. Diokno said. “Right now the policy rate is at 6.5%, so I see something like 5.5% by the end of 2024. The timing of course, will be, as I said, data dependent.”
The Philippines’ borrowing cost is at a 16-year high after the BSP’s most aggressive monetary tightening campaign in two decades to rein in stubborn inflation. While consumer prices eased to 3.9% from a year ago in December, the slowest in 22 months, rice costs remain volatile and recently gained the most in 15 years. — Bloomberg
