AGL 38.48 Decreased By ▼ -0.08 (-0.21%)
AIRLINK 203.02 Decreased By ▼ -4.75 (-2.29%)
BOP 10.17 Increased By ▲ 0.11 (1.09%)
CNERGY 6.54 Decreased By ▼ -0.54 (-7.63%)
DCL 9.58 Decreased By ▼ -0.41 (-4.1%)
DFML 40.02 Decreased By ▼ -1.12 (-2.72%)
DGKC 98.08 Decreased By ▼ -5.38 (-5.2%)
FCCL 34.96 Decreased By ▼ -1.39 (-3.82%)
FFBL 86.43 Decreased By ▼ -5.16 (-5.63%)
FFL 13.90 Decreased By ▼ -0.70 (-4.79%)
HUBC 131.57 Decreased By ▼ -7.86 (-5.64%)
HUMNL 14.02 Decreased By ▼ -0.08 (-0.57%)
KEL 5.61 Decreased By ▼ -0.36 (-6.03%)
KOSM 7.27 Decreased By ▼ -0.59 (-7.51%)
MLCF 45.59 Decreased By ▼ -1.69 (-3.57%)
NBP 66.38 Decreased By ▼ -7.38 (-10.01%)
OGDC 220.76 Decreased By ▼ -1.90 (-0.85%)
PAEL 38.48 Increased By ▲ 0.37 (0.97%)
PIBTL 8.91 Decreased By ▼ -0.36 (-3.88%)
PPL 197.88 Decreased By ▼ -7.97 (-3.87%)
PRL 39.03 Decreased By ▼ -0.82 (-2.06%)
PTC 25.47 Decreased By ▼ -1.15 (-4.32%)
SEARL 103.05 Decreased By ▼ -7.19 (-6.52%)
TELE 9.02 Decreased By ▼ -0.21 (-2.28%)
TOMCL 36.41 Decreased By ▼ -1.80 (-4.71%)
TPLP 13.75 Decreased By ▼ -0.02 (-0.15%)
TREET 25.12 Decreased By ▼ -1.33 (-5.03%)
TRG 58.04 Decreased By ▼ -2.50 (-4.13%)
UNITY 33.67 Decreased By ▼ -0.47 (-1.38%)
WTL 1.71 Decreased By ▼ -0.17 (-9.04%)
BR100 11,890 Decreased By -408.8 (-3.32%)
BR30 37,357 Decreased By -1520.9 (-3.91%)
KSE100 111,070 Decreased By -3790.4 (-3.3%)
KSE30 34,909 Decreased By -1287 (-3.56%)
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.