Makati City skyline on February 20, 2024. Mark Demayo, ABS-CBN News

Makati Skyline

Benise Balaoing

ABS-CBN News

<p>MANILA -- The Bangko Sentral ng Pilipinas (BSP) may ease rates at a slower pace this year, a Fitch Solutions unit said Thursday.</p><p>In its latest report, BMI said it expects key interest rates in the Philippines to settle at 5 percent in 2025, or 50 basis points (bps) more than its original forecast of 4.5 percent.</p><p>The BSP cut interest rates by 75 basis points to <a href="https://www.abs-cbn.com/news/business/2024/12/19/bsp-cuts-interest-rates-by-25-bps-1506" rel="noopener noreferrer" target="_blank">5.75 percent</a> in 2024. But BMI said the BSP may slow its easing pace going forward as the United States Federal Reserve has signaled a more hawkish stance going forward.</p><p>&quot;To be clear, we are still expecting the terminal rate to be around 4.50%. But the BSP will probably not get there in 2025,&quot; BMI said.</p><p>The Fitch subsidiary said it expects 50 bps of rate cuts in the first half of the year, then another 25 basis points in the second half.</p><p>BMI also said it expects the BSP to cut policy rates by a quarter of a point in its first meeting this year.</p><p>&quot;Frontloading cuts in [the first quarter] will only materially impact growth later in [the second half of] 2025 due to policy lags. But given the poor economic showing in [the third quarter], policymakers will seek to unwind monetary policy settings at the earliest possible time,&quot; it said.</p><p>The Philippines&#x27; gross domestic product expanded <a href="https://www.abs-cbn.com/business/2024/11/7/philippines-posts-lower-gdp-growth-in-third-quarter-925" rel="noopener noreferrer" target="_blank">5.2 percent</a> in the third quarter. Economic managers blamed El Nino and successive storms for the slower growth.</p><p>BMI also said it expects inflation to stay within the government&#x27;s target of 2 to 4 percent, although price pressures may be picking up in the coming months.</p><div><a href="https://www.abs-cbn.com/news/business/2025/1/7/inflation-quickens-in-december-but-full-year-rate-stays-within-target-0908" rel="noopener noreferrer" target="_blank">Inflation quickens in December but full-year rate stays within target</a></div><div><strong>RELATED STORY:</strong></div><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/AuwBdJrbtXY?&amp;ab_channel=ANC24%2F7autoplay=1&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div>

<p>The Bangko Sentral ng Pilipinas (BSP) may ease rates at a slower pace this year, a think-tank said.</p>

The Bangko Sentral ng Pilipinas (BSP) may ease rates at a slower pace this year, a think-tank said.

PH may see fewer interest rate cuts in 2025: Fitch unit | ABS-CBN

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PH may see fewer interest rate cuts in 2025: Fitch unit

PH may see fewer interest rate cuts in 2025: Fitch unit

Benise Balaoing,

ABS-CBN News

Published Jan 09, 2025 12:47 PM PHT

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