THE Bangko Sentral ng Pilipinas said that a cut in the interest rate for this year is possible, but stressed that it would be “too soon” to adjust in the first semester.

Bangko Sentral ng Pilipinas Gov. Eli Remolona said that this is since inflation is projected to remain above target for the second quarter of the year.
 

Remolona said the country’s reverse repurchase rate (RRP), used by banks to price loans, is at 6.5 percent.

“Oo naman, within the year. But maybe first semester is too soon. (2nd half gov?) pwede siguro,” Remolona said.

The country’s inflation eased to 3.9 percent in December 2023. 

But the full full year average hit 6 percent, which is above the government’s 2 to 4 percent target range.

“The number that might come out in January might be a bit low. And then babawi ‘yon sa second quarter. So second quarter numbers may be a bit high only because of base effects, not because inflation is really high,” he said.

Remolono said he also expects a strong gross domestic product (GDP) growth outturn for the last quarter of 2023.