BSP rate cuts seen in lockstep with US Fed

The Bangko Sentral ng Pilipinas (BSP) is expected to move in lockstep with the US Federal Reserve as it pivots to an easing cycle after emerging as the most aggressive central bank in the region.

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In a press conference, Aris Dacanay, economist for ASEAN at HSBC, said the BSP may start cutting interest rates by 75 basis points this year.

“We do expect the BSP to cut its interest rates step by step or alongside the US Fed,” Dacanay said.

The BSP has emerged as the most aggressive central bank in the region after raising key policy rates by 450 basis points since May 2022 to tame inflation and stabilize the peso that slumped to an all-time low of 59 to $1 in October 2022.