AIRLINK 81.10 Increased By ▲ 2.55 (3.25%)
BOP 4.82 Increased By ▲ 0.05 (1.05%)
CNERGY 4.09 Decreased By ▼ -0.07 (-1.68%)
DFML 37.98 Decreased By ▼ -1.31 (-3.33%)
DGKC 93.00 Decreased By ▼ -2.65 (-2.77%)
FCCL 23.84 Decreased By ▼ -0.32 (-1.32%)
FFBL 32.00 Decreased By ▼ -0.77 (-2.35%)
FFL 9.24 Decreased By ▼ -0.13 (-1.39%)
GGL 10.06 Decreased By ▼ -0.09 (-0.89%)
HASCOL 6.65 Increased By ▲ 0.11 (1.68%)
HBL 113.00 Increased By ▲ 3.50 (3.2%)
HUBC 145.70 Increased By ▲ 0.69 (0.48%)
HUMNL 10.54 Decreased By ▼ -0.19 (-1.77%)
KEL 4.62 Decreased By ▼ -0.11 (-2.33%)
KOSM 4.12 Decreased By ▼ -0.14 (-3.29%)
MLCF 38.25 Decreased By ▼ -1.15 (-2.92%)
OGDC 131.70 Increased By ▲ 2.45 (1.9%)
PAEL 24.89 Decreased By ▼ -0.98 (-3.79%)
PIBTL 6.25 Decreased By ▼ -0.09 (-1.42%)
PPL 120.00 Decreased By ▼ -2.70 (-2.2%)
PRL 23.90 Decreased By ▼ -0.45 (-1.85%)
PTC 12.10 Decreased By ▼ -0.89 (-6.85%)
SEARL 59.95 Decreased By ▼ -1.23 (-2.01%)
SNGP 65.50 Increased By ▲ 0.30 (0.46%)
SSGC 10.15 Increased By ▲ 0.26 (2.63%)
TELE 7.85 Decreased By ▼ -0.01 (-0.13%)
TPLP 9.87 Increased By ▲ 0.02 (0.2%)
TRG 64.45 Decreased By ▼ -0.05 (-0.08%)
UNITY 26.90 Decreased By ▼ -0.09 (-0.33%)
WTL 1.33 Increased By ▲ 0.01 (0.76%)
BR100 8,052 Increased By 75.9 (0.95%)
BR30 25,581 Decreased By -21.4 (-0.08%)
KSE100 76,707 Increased By 498.6 (0.65%)
KSE30 24,698 Increased By 260.2 (1.06%)
Markets

Philippine central bank seen holding rates steady after surprise cut

  • Accordingly, many economists see further monetary easing next year, given the relatively weak fiscal support from the government to pull the economy out of its first recession in nearly three decades.
Published December 16, 2020

MANILA: The Philippine central bank is expected to hold interest rates steady on Thursday, awaiting further signals on whether it needs to provide more policy support to the country's pandemic-hit economy, a Reuters poll showed.

All 13 economists surveyed predicted the Bangko Sentral ng Pilipinas (BSP) will leave the interest rate on its overnight reverse repurchase facility unchanged at a record low of 2.0% in its last policy meeting of the year.

"The BSP will most likely wait it out until the fourth-quarter GDP and other economic indicators are out to ascertain the pace of economic recovery and start easing again," Ruben Carlo Asuncion, Union Bank of the Philippines chief economist, said.

The BSP has slashed rates by a cumulative 200 basis points this year, including a surprise 25 bps reduction last month, making it one of the most aggressive central banks worldwide in policy easing.

It has also provided additional liquidity support to the economy by purchasing government securities and extending loans to the government.

Despite the unprecedented monetary policy support, the economy shrank more than expected in the third quarter on an annual basis, hit by weak demand and a slowdown in government spending.

The government now expects the economy to contract by 8.5%-9.5% for the year, worse than the previous forecast of a 5.5% decline.

Accordingly, many economists see further monetary easing next year, given the relatively weak fiscal support from the government to pull the economy out of its first recession in nearly three decades.

"BSP's monetary stance remains clearly dovish, supporting our forecast of further rate cuts early next year," said Euben Paracuelles, Southeast Asia economist at Nomura, who pencilled in an additional 50 bps cut in the first quarter.

Comments

Comments are closed.