BSP seen to start rate cuts in August

The Bangko Sentral ng Pilipinas (BSP) could start slashing interest rates in August this year until the first quarter of 2025 after keeping key rates elevated for a longer period of time, Nomura Global Markets Research said.

- LAWRENCE AGCAOILI

In a commentary titled, "Philippines: Continuing to signal patience with a policy pivot," Nomura said inflation is unlikely to stay within the BSP's two to four percent target range before July, which will likely prompt monetary authorities to maintain higher-for-longer interest rates.

"This remains consistent with our view that BSP will exercise patience in its pivot.

We, therefore, reiterate our forecast for BSP to start cutting only in August, and deliver a total of 150 bp in rate cuts to five percent through Q1 2025," Nomura said.