Anemic GDP seen to temper rate hikes
The Philippines' central bank may pause interest rate hikes following a weaker-than-expected second-quarter GDP growth of 2.3 percent. Analysts suggest that cooling inflation and economic strain provide the Monetary Board with room to prioritize growth over further tightening.
Why it matters
This decision is critical for the Philippine economy as it balances the need to control inflation against the risk of stifling post-pandemic recovery.
MANILA, Philippines - The weaker second-quarter growth could prompt the central bank to slow the pace of rate increases, or pause them altogether, as policymakers may seek to avoid adding pressure to an economy already strained by high inflation and weak confidence, analysts said.
In a note to clients, Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said the Bangko Sentral ng Pilipinas (BSP) may think harder about delivering another rate increase after growth had slowed to another postpandemic low last quarter.
READ: Postpandemic low: Q2 GDP grew by just 2.3%
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