S&P sees more BSP rate cuts in next 3 years

Debt watcher S&P Global Ratings expects more rate cuts from the Bangko Sentral ng Pilipinas (BSP) over the next three years, amid the US Federal Reserve's shift to an easing cycle and soft economic growth in the Philippines.

- KEISHA TA-ASAN

In its Asia-Pacific Economic Outlook report for the fourth quarter, S&P said central banks in the region are unlikely to cut rates aggressively even after the Fed's rate cut last week, except for China, Indonesia and the Philippines.

"We have not advanced our forecast for policy rate cuts in Asia compared to our June projections, with the exceptions of China, Indonesia and the Philippines," Louis Kujis, chief economist for Asia-Pacific at S&P Global Ratings, said.

For the Philippines, S&P sees the country's key interest rate at 5.5 percent in end-2024, down by 100 basis points from 6.50 percent in end-2023. This is lower than the debt watcher's previous forecast of 6.25 percent given in June.