BSP widely expected to hike rates by 25 bps
Economists widely expect the Bangko Sentral ng Pilipinas to raise interest rates by 25 basis points to combat persistent inflation and currency weakness. Despite some moderation in headline inflation, external risks and rising price pressures remain primary concerns for the central bank.
Why it matters
Monetary policy adjustments in the Philippines directly impact consumer borrowing costs and the broader economic recovery trajectory.
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is widely expected to raise interest rates for a third straight meeting on Thursday as above-target inflation, a weak peso and mounting external risks outweigh concerns over a sharp slowdown in economic growth.
Nine of 13 economists polled by The STAR expect the BSP's Monetary Board to deliver another 25-basis-point hike on Aug. 27, which would bring the benchmark interest rate to five percent.
The remaining four economists expect the BSP to keep the key policy rate unchanged at 4.75 percent, citing easing inflation, weak domestic demand and the economy's disappointing second-quarter performance.
HSBC senior ASEAN economist Aris Dacanay said another hike would allow the BSP to build a buffer against both inflation and foreign exchange risks.
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