Recto sees 150 bps rate cuts in 2 years

The Bangko Sentral ng Pilipinas BSP) may cut interest rates by as much as 150 basis points in the next two years mainly due to the downtrend in inflation, according to Finance Secretary Ralph Recto.

- KEISHA TA-ASAN

Speaking at the Philippine Economic Briefing yesterday, Recto said it is "very much" possible for the Monetary Board to start cutting borrowing costs in the third quarter this year.

"It's possible that we may have a rate cut this year and possibly more rate cuts next year. Surely I don't expect interest rates to go any higher," he said. "Maybe 150 basis points in the next two years." However, the outlook would still largely depend on the inflation path and the future policy moves of the US Federal Reserve.

"The spreads between the US and the Philippines should not be too different or else you might have (capital) flight to safety," he said.