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BSP signals less dovish stance
Risks to inflation continue to hover over monetary policy decisions.
By Metrobank Research
In its Philippine Economic Briefing (PEB) on May 27, 2024, the Bangko Sentral ng Pilipinas (BSP) signaled a less dovish stance compared to statements in last week’s Monetary Board (MB) meeting which opened the possibility of a rate cut as early as August.
The BSP sees inflation peaking in the May to July period, but it expects full year inflation to remain at the upper end of its 2%-4% target range.
Meanwhile, Finance Secretary Ralph Recto, a member of the MB, reiterated his own expectations of 150 basis points of total cumulative cuts over the next two years.
On dollar-peso exchange rate, the BSP reaffirmed that open market operations remain focused on the presence of stress in the market which may affect inflation expectations.
Notes from the PEB: Not as dovish?
In the central bank’s recent Philippine Economic Briefing, we see a less dovish monetary policy ahead.
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