Finance Secretary Ralph Recto said he agrees with market consensus that the Bangko Sentral ng Pilipinas (BSP) will likely deliver another 25 basis points cut this Thursday.
“There is a great possibility, a probability. I agree with the market consensus of a 25 basis point decrease,” Recto told reporters in a recent press chat.
The Monetary Board of the BSP has so far reduced key interest rates by a total of 50 basis points this year.
This brings the target reverse repurchase rate to 6 percent and the overnight deposit and lending facilities rate to 5.50 percent and 6.50 percent.
Economists earlier said BSP will likely continue with its easing cycle during the Monetary Board’s last meeting for the year which will be held this Thursday, as inflation is expected to remain within target in the coming months.
For his part, Recto said lower interest rates will help boost consumer spending and investments.
“If your credit card interest rate was lower, you’d probably consume more too, right? So, more investment, more consumption,” he said.
For next year, Recto said he expects the BSP to further cut rates by 75 basis points.
“You know, my position was a 100. But depends also what happens, what the Fed does. So, we have to wait for the inflation numbers. Wait for what the Fed does, I suppose. But more or less, my expectation is 75 basis points,” he added.
Recto is currently a member of the Monetary Board representing the government sector. (PNA)