The Philippines: BSP sees no reason for further easing

  • The Bangko Sentral ng Pilipinas (BSP) is not inclined to cut rates further at this time and will likely keep rates steady in the next quarters after 2Q20, BSP Governor Benjamin E. Diokno said on 10 Aug 20.
  • “There is no compelling reason why the BSP has to move sooner on further policy cuts at this time. Monetary policy works with a lag so our reading is that our aggressive monetary policies have yet to be digested by the market,” Mr. Diokno said in an interview with ABS-CBN News Channel.
  • The Philippines plunged into recession for the first time since 1991 after gross domestic product (GDP) contracted by 16.5% in 2Q20. Economic activity collapsed as the government implemented one of the world’s strictest and longest lockdowns to curb the spread of COVID-19.
  • Mr. Diokno said keeping rates unchanged for the rest of 2020 is “a possibility.”
  • The previous policy cut, which was “a pre-emptive anticipation of the steeper 2Q20 GDP contraction,” may have yet to work its way into the financial system, said Security Bank Corp. Chief Economist Robert Dan J. Roces.

External Link :