Fitch’s BMI Research: BSP to Hold Rates Steady, Eyes Second Half for Possible Cuts

The Bangko Sentral ng Pilipinas (BSP) is poised to keep rates unchanged in its May 16 policy meeting, aiming to ensure inflation falls within the 2-4 percent target range before making any rate cuts, likely in the second half of the year.

According to a new report by the Fitch Group’s Country Risk & Industry Research, the BSP is expected to push through with up to 75 basis points of rate reductions in the latter part of 2024, reflecting a cautious approach to monetary easing.

This strategy mirrors global trends, with the BSP likely to synchronize its rate cuts with major central banks, particularly the US Federal Reserve.

Economic resilience and the need for currency stability are key factors in the BSP's decision-making, indicating a careful balance between supporting growth and maintaining financial stability.