THE Philippine central bank is open to delivering another rate cut in its first monetary policy meeting next year, governor Eli Remolona said on Friday (Dec 20).
While the Federal Reserve is less dovish now, the Bangko Sentral ng Pilipinas (BSP) is “still at the same trajectory as before” on monetary easing, Remolona said.
“We ourselves are neither more dovish nor less dovish,” the central bank chief said. Core inflation will likely ease next year, he added, supporting the case to further ease the policy rate which Remolona described as “still somewhat restrictive”.
The Philippine peso gained on Friday after closing at the record low of 59 to the greenback the day before. The nation’s benchmark stock index inched higher, bucking losses in the region.
The BSP capped off the year with a third quarter-point rate cut on Thursday, as inflation remained on target and economic growth slowed. It also signalled more rate cuts next year at a measured pace.
At the same time, the BSP flagged potential price risks from geopolitical developments, as the world contends with uncertainties over incoming US president Donald Trump’s economic policies.
Trump’s win has also triggered a resurgence in the US dollar, causing currencies around the world to slump. The BSP has been “more active than usual, but not that active” in the foreign exchange market, Remolona said on Friday.
The central bank chief also said that monetary authorities are watching the peso “very closely” to ensure that its weakness won’t fan inflation in the South-east Asian nation that imports oil and rice needs. BLOOMBERG
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