By means of Luisa Maria Jacinta C. Jocson, Reporter
CEBU — The easing by the Philippine central bank The cycle is still ongoing, although the ECB could choose to keep rates stable at its peak December meetingFcially said.
“We are still in the easing cycle. Either we cut in December or we cut in the next meeting, but gradually,” Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. told reporters on the sidelines of the BSP-International Monetary Fund (IMF) Systemic Risk. Dialogue in Mactan, Cebu on Tuesday.
Asked whether the central bank could keep interest rates stable at its December meeting, Mr. Remolona said in mixed English and Filipino: “Yes, of course. It depends on the data. We are still not sure about December.”
Mr Remolona reiterated that the central bank will continue to cut interest rates in steps of 25 basis points (bp).
He previously said the BSP will not necessarily cut rates every quarter or every meeting.
Since the start of the easing cycle in August, the BSP has cut borrowing costs by a total of 50 basis points so far.
The Monetary Board proposed a 25 bp cut at its meetings in August and October, bringing the benchmark to 6%.
Mr Remolona had previously raised the possibility of a 25 basis point cut on December 19, the Monetary Board has proposed. Flast policy meeting of this year.
Meanwhile, he said weak gross domestic product (GDP) growth in the third quarter was likely an “aberration” and growth was likely to recover in the fourth quarter.
The Philippine economy grew by a weaker-than-expected 5.2% in the third quarter. Ffive quarters.
This brought GDP growth to 5.8% in the nine-month period. The economy needs to grow by at least 6.5% in the fourth quarter to ensure it can reach the lower end of the government’s full-year target of 6-7%.
Instead, the central bank is closely monitoring the latest developmentsFdata, Mr Remolona said.
“The next number we can expect is NovemberFlation number, we’ll see what that is. Our expectation is that it will still remain within the target group.”
Head inFInflation rose to 2.3% in October, bringing the ten-month average to 3.3%. This was still within the BSP’s target of 2-4%.
By 2025, the BSP chief said the Monetary Board could likely implement rate cuts around 100 basis points.
‘That’s not exactly. It could be more, it could be less, but that is on the margins,” he added.
PESO PERFORMANCE
Meanwhile, the BSP governor said he is not concerned about the peso’s recent performance.
“It is below P59. We don’t worry much about whether the peso is depreciating or appreciating. We are concerned about transit eFperfect. At this point, it’s still OK,” Mr. Remolona said.
The peso closed at P58.81 per dollar on Tuesday, falling 13 centavos from Monday’s P58.68, data from the Bankers Association of the Philippines showed.
Markets are watching to see if the peso will fall to the P59 per dollar level. The peso fell to a record low of P59 per dollar in October 2022.
However, he said the central bank had intervened in “small amounts.” “A little bit, so the dollar won’t depreciate sharply,” he said.
“We leave it to the guys in the financial markets, but if the price drops very sharply in value, we will talk. If it is not too sharp, it will not become inflationary. It is inflationary when it is sharp and persistent.”
He said the peso’s recent weakness was expected after Donald J. Trump was elected US president. The U.S. dollar is rising amid market expectations that Trump would impose higher rates that could fuel inflation and delay the Federal Reserve’s planned rate cuts.
“We monitor the fluctuations that occur over a few months, not from day to day. Normally, this kind of news is expected to put pressure on the peso the night before.”