BSP widely expected to hike rates by 25 bps
The Bangko Sentral ng Pilipinas (BSP) is widely expected to raise interest rates for a third straight meeting on Thursday as above-target inflation, a weak peso and mounting external risks outweigh concerns over a sharp slowdown in economic growth.
The Bangko Sentral ng Pilipinas (BSP) is widely expected to raise interest rates by 25 basis points in their next policy meeting on Thursday, according to a majority of economists. This rate hike would bring the benchmark interest rate to five percent. The decision to hike comes as the country faces above-target inflation, a weak Philippine peso, and mounting external risks.
Despite concerns over a slowdown in economic growth, nine out of 13 polled economists believe the BSP will act decisively to build a buffer against inflation and forex risks. HSBC's Aris Dacanay argues that a 25-bps hike would provide the necessary cushion, while BPI's Jun Neri highlights risks such as monsoon rains, volatile oil prices, and higher labor costs.
However, some economists, like UnionBank's Ruben Carlo Asuncion and Metrobank's Nicholas Mapa, anticipate that this may be the final hike of the year, citing softer GDP growth and moderating inflation as factors to consider.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
