Citi sees 150 bps rate cuts in 2 years

Global banking giant Citi expects the Bangko Sentral ng Pilipinas (BSP) to cut borrowing costs by a total of 75 basis points this year and another 75 basis points in 2025, which will provide support to the Philippines’ economic growth.

- KEISHA TA-ASAN

Following the BSP’s policy decision to keep borrowing costs unchanged last week, Nalin Chutchotitham, economist for the Philippines at Citi, said the bank sees 25 basis points of rate cuts in August, October and December this year.

If realized, the key interest rate will go down to 5.75 percent by ps rate cu end-2024. This will be followed by 25-basis-point rate cuts in February, May and August in 2025, which will bring the key rate to five percent by end-2025.

Chutchotitham said monetary easing would likely be needed to support economic growth.

“While growth has been resilient so far, first quarter GDP (gross domestic product) growth at 5.7 percent was below market’s expectation,” she said.