BSP seen cutting interest rates by second half

Executives of Philippine banks still expect the Bangko Sentral ng Pilipinas (BSP) to pivot to an easing cycle and cut borrowing costs by the second half.

- KEISHA TA-ASAN

Jose Teodoro Limcaoco, president and CEO of the Bank of the Philippine Islands (BPI), said market players have pushed back their rate cut bets for this year as some see the BSP pivoting by the third quarter, the fourth quarter or even next year.

"Our view is, (rate cuts by) late third quarter or early fourth quarter.

But I could be wrong," he said.

He also said that BSP Governor Eli Remolona Jr. has been monitoring the developments surrounding domestic inflation and the future policy moves of the US Federal Reserve.

"The local economy is growing OK, so he (Remolona) can actually wait. But he has to watch inflation," Limcaoco said, adding that " he has to also watch the US. He cannot lower rates if the US doesn't lower because that can cause the currency (peso) to depreciate."