Governor Remolona Rules Out Early Rate Cut, Says Peso Support Is At 57 Per Dollar

Bangko Sentral ng Pilipinas Governor Eli reiterated that a resumption of monetary tightening remains on the table, including the option of an off-cycle rate hike before the November monetary policy meeting. In an interview with Bloomberg, the official reaffirmed his hawkish credentials, noting that a pivot to the easing cycle is unlikely in 1H2024.

• Remolona set the bar for monetary easing relatively high, declaring that "for a rate cut, you need the economy to slow down significantly and inflation to maybe go below the target range". He warned that the materialisation of upside risks to the price outlook could result in a 25bp hike at the November meeting or before.
• The Governor said that while he would like to lower the reserve requirement ratio (RRR) to 5.0% from the current 9.5% during his term, cutting the rate is out of the question while the BSP remains on tightening mode.
• Remolona said that the USD/PHP resistance level was last advised at 57.00. Spot USD/PHP has been unsuccessfully testing that level since mid-August.