Japanese Investment firm Nomura forecasted that the Bangko Sentral ng Pilipinas (BSP) would deliver larger-than-expected interest rate cuts this year.
Nomura said there is a possibility that the central bank would cut its interest rate by a total of 250 basis points (bps) from the middle of the third quarter of 2024 to the second quarter of 2025.
The Monetary Board in June kept its benchmark rate at 6.5 percent, the highest in over 17 years. Nomura’s baseline forecast for the Philippines’ policy rate is at 5 percent at the end of 2025, but its Modified Taylor Rule (MTR) estimates see the key rate dropping to as low as 4 percent.
Nomura’s baseline projection anticipates that the BSP would deliver its rate cut in October, projecting a total of 150 bps of cuts by the second quarter of 2025.
