THE BANGKO SENTRAL ng Pilipinas (BSP) could raise its benchmark rate by as much as 75 basis points (bps) to bring the policy rate to 6.25% in the first half, Fitch Solutions Country Risk & Industry Research said.
A man looks at the Metro Manila skyline, Jan. 1. — PHILIPPINE STAR/MIGUEL DE GUZMANbenchmark rate by as much as 75 basis points to bring the policy rate to 6.25% in the“Our central forecast is for the BSP to hike its policy rate by an additional 75 bps to peak over 6.25% in the first half of 2023,” Fitch Solutions Country Risk analyst Shi Cheng Low said in a webinar on Monday, adding that inflation might take longer to peak.
“Larger-than-expected rate hikes by the Fed could exacerbate downside volatility for the peso once again and this could prompt steeper rate hikes by the BSP to ensure currency stability,” he added. The peso closed at P54.575 versus the US dollar on Monday, up by 31.5 centavos from its P54.89 finish on Friday. Since its record low close of P59 against the greenback on Oct. 17, 2022, the peso has appreciated by P4.425 or 8.1%.
“The Philippine economy stayed resilient in the third quarter of 2022. The economy was supported by substantial expansion, investment growth, and the release of pent-up demand,” Mr. Low said.
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