Finance Secretary Benjamin Diokno projects the central bank could do a rate cut by as much as 100 basis points (bps) this year.
“We observe what’s happening abroad, principally what’s happening at the Fed, so a 75-bps cut by the Fed this year could actually be matched by the central bank or could be even 100 bps,” Diokno said yesterday in an interview with Bloomberg TV.
“Right now, the policy rate is at 6.5 percent, so I see something like 5.5 percent by the end of 2024,” he added.
The finance chief, however, said the timing will be data dependent.
“(It will) probably be towards the second semester of next year,” he said.
Meanwhile, Diokno said inflation may slightly increase in the second quarter of the year.
“The expectation is that inflation will be within the two to four percent target band in the first quarter. It might increase slightly in the second quarter because of base effect but for the whole year of 2024, it would be within the target band of two to four percent and that’s good news,” he said.
The Philippine Statistics Authority recently reported that the Philippines’ overall inflation rate further decelerated to 3.9 percent in December 2023, the lowest rate recorded in the previous year.
This brings the year-to-date headline inflation rate to 6 percent, the same as the Development Budget Coordination Committee’s assumption of 6 percent for full year 2023.
