{"id":19057,"date":"2024-06-04T03:17:51","date_gmt":"2024-06-04T03:17:51","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-may-start-easing-by-q4\/"},"modified":"2024-06-04T03:17:51","modified_gmt":"2024-06-04T03:17:51","slug":"bsp-may-start-easing-by-q4","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-may-start-easing-by-q4\/","title":{"rendered":"BSP may start easing by Q4"},"content":{"rendered":"
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THE BANGKO SENTRAL ng Pilipinas <\/span>(BSP) will likely begin easing by the fourth quarter when inf<\/span>lation is expected to have f<\/span>irmly settled within target, Metropolitan Bank & Trust Co. (Metrobank) said.<\/p>\n

\u201cIn line with the BSP\u2019s guidance, we forecast domestic headline inflation to peak in July, which in turn would only be observable in early August,\u201d the Metrobank Research and Market Strategy Department said in a note.<\/p>\n

The central bank earlier said inf<\/span>lation could temporarily accelerate above the 2-4% target from May to July due to base ef<\/span>fects. However, inf<\/span>lation is expected to return to the target after July.<\/p>\n

\u201cThis supports our view that the BSP will start its easing cycle in the fourth quarter, rather than the third quarter, when in<\/span>f<\/span>lation expectations have settled well within the BSP\u2019s 2-4% range,\u201d Metrobank said. <\/span><\/p>\n

The Monetary Board\u2019s next meeting is on June 27, but BSP Governor Eli M. Remolona, Jr. has signaled that policy easing could begin as early as August. <\/span><\/p>\n

The Monetary Board\u2019s only meeting in the third quarter is scheduled for Aug. 15, followed by two meetings in the fourth quarter (Oct. 17 and Dec. 19).<\/p>\n

Metrobank said the central bank would likely keep a sufficiently restrictive policy <\/span>stance as upside risks to in<\/span>f<\/span>lation remain. <\/span><\/p>\n

It cited risks such as \u201cstill-elevated food prices and heightened geopolitical risks that could lead to renewed supply shocks.\u201d<\/p>\n

Inf<\/span>lation likely accelerated for a fourth straight month to 4% in May, according to the median estimate in a BusinessWorld <\/i>poll of 16 analysts.<\/p>\n

The BSP gave an inflation forecast of 3.7-4.5% for May. Inflation data will be released on June 5.<\/p>\n

\u201cWe also continue to see the BSP lagging the US Federal Reserve\u2019s own easing cycle, where we expect the <\/span>f<\/span>irst policy rate cut in the September Federal Open Market Committee (FOMC) meeting, which should then support the peso,\u201d Metrobank said. <\/span><\/p>\n

Mr. Remolona earlier said that while the BSP monitors the Fed\u2019s moves, it does not need to wait for the US central bank to cut rates. <\/span><\/p>\n

On May 16, the Monetary Board kept its key policy rate steady at a 17-year high of 6.5%. This was the fifth straight meeting that the BSP stood pat since it delivered an off-cycle rate hike of 25 basis points (bps) in October. <\/span><\/p>\n

From May 2022 to October 2023, the central bank raised borrowing costs by 450 bps. <\/span><\/p>\n

Meanwhile, Metrobank said it expects the peso to continue to strengthen.\u00a0<\/span><\/p>\n

\u201cWe expect the peso to be further supported by a narrowing current account balance driven in turn by improving trade deficit levels and recovering travel exports, accompanied by an expected uptick in business process outsourcing (BPO) revenues and overseas Filipino worker (OFW) remittances in the fourth quarter,\u201d it said. <\/span><\/p>\n

The BSP expects a current account deficit of $6.1 billion by the end of 2024, equivalent to -1.3% of the gross domestic product (GDP). <\/span><\/p>\n

Metrobank said it sees the peso settling at P56.10 a dollar by yearend. <\/span><\/p>\n

In May, the peso touched the P58-per-dollar level for the first time in over 18 months. <\/span><\/p>\n

The BSP has said it would continue to monitor the foreign exchange market and would participate if necessary to \u201csmoothen excessive volatility and restore order during periods of stress.\u201d<\/span><\/p>\n

On Monday, the peso closed at P58.68 per dollar, weakening by 17 centavos from its P58.51 finish on Friday. This was the worst <\/span>f<\/span>inish in almost 19 months or since its P58.80-per-dollar close on Nov. 3, 2022. \u2014 Luisa Maria Jacinta C. Jocson<\/b><\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE BANGKO SENTRAL ng Pilipinas (BSP) will likely begin easing by the fourth quarter when inflation is expected to have firmly settled within target, Metropolitan Bank & Trust Co. (Metrobank) said. \u201cIn line with the BSP\u2019s guidance, we forecast domestic headline inflation to peak in July, which in turn would only be observable in early [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[5796,14644,9926,170,1720],"class_list":["post-19057","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-bsp","tag-bworldonline","tag-easing","tag-may","tag-start"],"yoast_head":"\nBSP may start easing by Q4 - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/bsp-may-start-easing-by-q4\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP may start easing by Q4 - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"THE BANGKO SENTRAL ng Pilipinas (BSP) will likely begin easing by the fourth quarter when inflation is expected to have firmly settled within target, Metropolitan Bank & Trust Co. 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