Metropolitan Bank & Trust Co. sees 2024 inflation settling toward the lower end of its 3.3-3.6 percent target range and believes the Philippine central bank will hold off from cutting policy rates until its October 17 meeting with a 25-basis point reduction.
A further 25-bp cut by the Bangko Sentral ng Pilipinas (BSP) is expected on December 19 to support the peso, Metrobank Research said in a report on Friday after the government released data showing June inflation unexpectedly easing to 3.7 percent.
Metrobank also acknowledged the risk of earlier policy action at the August 15 policy meeting.
The June inflation print fell within BSP’s forecast of 3.4-4.2 percent, but below Metrobank’s 4.1 percent forecast and consensus expectations of 3.9 percent.
Year-to-June average inflation is at 3.5 percent, within Metrobank’s forecast range and BSP’s target range of 2-4 percent.
Housing, water, electricity, gas, and other fuels, particularly electricity rates, which decelerated by 13.6 percent, were primary drivers of the lower-than-expected inflation print, the report showed.
