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Finance Chief Looks For 100bps in BSP Cuts This Year

PHILIPPINES

Philippines Finance Secretary Diokno has stated in a BBG TV interview that the BSP policy rate will likely be cut by 100bps this year (which would take the policy rate down to 5.50% from 6.50%).

  • Diokno, who sits on the BSP board, stated that inflation will be within the BSP's target band (2-4%) in Q1 and that it will likely be in the middle of the target band in 2025. The rate cut will be data dependent and also dependent on how much the Fed delivers.
  • This contrasts with recent comments from BSP Governor Remolona. The governor has stated that while the central bank doesn't want to over tighten, the current elevated inflation backdrop is unlikely to see a policy pivot in the near term.

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