{"id":19649,"date":"2024-07-08T03:06:08","date_gmt":"2024-07-08T03:06:08","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-still-hints-at-rate-cut-in-august\/"},"modified":"2024-07-08T03:06:08","modified_gmt":"2024-07-08T03:06:08","slug":"bsp-still-hints-at-rate-cut-in-august","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-still-hints-at-rate-cut-in-august\/","title":{"rendered":"BSP still hints at rate cut in August"},"content":{"rendered":"
\n

By Luisa Maria Jacinta C. <\/b>Jocson, <\/b><\/span>Reporter <\/i><\/p>\n

A POSSIBLE BREACH in the <\/span>inf<\/span>lation target this month will not derail the Bangko Sentral ng Pilipinas\u2019 (BSP) planned rate cut by August, its top off<\/span>icial said.<\/p>\n

BSP Governor Eli M. Remolona, <\/span>Jr.<\/span> said July in<\/span>f<\/span>lation overshooting<\/span> the 2-4% target is \u201cexpected\u201d and unlikely to af<\/span>fect the likelihood of a rate cut in August.<\/p>\n

\u201cWe do expect it to breach in July. So, if it doesn\u2019t breach, then it\u2019s better than expected,\u201d he told reporters on the sidelines of an event late on Friday.<\/p>\n

Mr. Remolona said there is a 50-50 chance that July inf<\/span>lation could breach the 2-4% target.<\/p>\n

The central bank earlier warned that inf<\/span>lation could temporarily accelerate to above target from May to July, but so far inflation has been below 4% in May and June.<\/p>\n

Headline inflation eased to 3.7% in June from 3.9% in May, marking the seventh straight month that inf<\/span>lation settled within the 2-4% target band.<\/p>\n

\u201cThis is a cause for reassurance because it seems to be going in the direction we expected. So, it\u2019s reassuring, but we need a few more numbers. So, it\u2019s not yet time to declare victory, as people say,\u201d Mr. Remolona added.<\/p>\n

Meanwhile, National Economic and Development Authority\u00a0 <\/span>Secretary Arsenio M. Balisacan said that the downtrend of inf<\/span>lation should continue in the coming months.<\/p>\n

\u201cI cannot say the worst is over, but I think that extreme situations are not likely any<\/span>more,\u201d he told reporters on Friday<\/span> evening.<\/span><\/p>\n

\u201cI think we expect (inf<\/span>lation) in the coming months to come down because the El Ni\u00f1o is over, hoping that the La Ni\u00f1a will not bring severe f<\/span>looding and all that, and then I think prices will start to moderate. I think that it will enable us to achieve the target of 2-4%,\u201d he added.<\/p>\n

Mr. Balisacan said the outlook already takes into account the recently approved wage hike in the National Capital Region (NCR).<\/p>\n

\u201cMore or less, that\u2019s already anticipated. The wage increases are not unreasonable. They\u2019re within the inflation experienced by our workers,\u201d he added.<\/span><\/p>\n

The Regional Tripartite Wages and Productivity Board has approved a P35 minimum wage hike for workers in NCR, bringing the daily wage to P645 starting July 17. <\/span><\/p>\n

Meanwhile, Diwa C. Guinigundo, country analyst for the Philippines of GlobalSource Partners, said there is a \u201cgreater likelihood of an easing in 2024 especially if more of the downside risks materialize including the reduction in rice imports tarif<\/span>f.\u201d<\/p>\n

President Ferdinand R. Marcos, Jr. <\/span>last month signed Executive Order No. 62, which introduces a lowered tarif<\/span>f regime for agricultural products until 2028, including rice. Tariffs on rice imports were slashed to 15% from 35% previously.<\/p>\n

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said that inf<\/span>lation may have already peaked for the year and will likely remain at the upper end of the 2-4% target in July before declining by August.<\/p>\n

\u201cWith El Ni\u00f1o now over, rice production is expected to recover in the second half of the year, which could result in a drop in prices as supply improves,\u201d Mr. Neri said in a report.<\/p>\n

\u201cThe price decrease might be even more signif<\/span>icant due to the rice tarif<\/span>f cut that the government will implement this month,\u201d he added.<\/p>\n

Mr. Neri said that when the Rice Tariff<\/span>ication Law was implemented in 2019, the \u201cresulting decline in rice prices shaved of<\/span>f up to 1.2% from headline inf<\/span>lation.\u201d<\/p>\n

PESO \u2018BEHAVING\u2019
\n<\/b>In a note, Chinabank Research said that the slower inf<\/span>lation in June and \u201cupbeat\u201d inf<\/span>lation outlook would support the BSP\u2019s planned rate cut at its meeting in August.<\/p>\n

\u201cThere is a higher chance of an August rate cut, with prices and the peso \u2014 which seems to be \u2018behaving\u2019 \u2014 a part of the decision point,\u201d Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.<\/p>\n

\u201cWith the inflation outlook now improving, the BSP will likely start cutting interest rates in August,\u201d Mr. Neri added.<\/p>\n

Mr. Remolona noted that cutting by 75 basis points (bps) for the year may be too \u201caggressive\u201d and may cause a \u201chard landing.\u201d He earlier said the BSP could cut rates by 50 bps for the full year.<\/p>\n

However, Mr. Roces warned that upside risks to inf<\/span>lation still remain.<\/p>\n

\u201cWe agree with the Philippine Statistics Authority\u2019s observation that there is no clear signal that inflation has peaked, which we attribute to the upside risks to food and fuel prices,\u201d he said.<\/span><\/p>\n

Mr. Guinigundo, a former central bank deputy governor, said that the BSP should monitor the potential uptick in power and transport costs as well as wage adjustments.<\/p>\n

\u201cStill on the supply side, if the delay in imports should be prolonged, that could push importers to delay their importation of rice and cause rice supply to dwindle and its price to surge again. The weakening trend in (the) peso could also have some inf<\/span>lationary impact if sharp and prolonged,\u201d he said.<\/p>\n

\u201cIf inflation should peak in July, that would just be a single point in the wider space of monetary policy assessment \u2014 like inf<\/span>lation forecasts and balance of risks,\u201d he added.<\/p>\n

Chinabank Research also noted the potential impact of the peso on the BSP\u2019s easing cycle.<\/p>\n

\u201cNevertheless, the persistent upside price pressures, along with the movement of the peso against the US dollar, could prompt the BSP to maintain a cautious stance with regard to its future monetary policy decisions,\u201d it said.<\/p>\n

The peso has been trading at the P58-per-dollar level since May.<\/p>\n

On Friday, the peso closed at P58.53 against the greenback, strengthening by five centavos from its P58.58 finish on Thursday. This was its strongest finish in almost a month or since its P58.52-a-dollar close on June 7.<\/span><\/p>\n

\u201cThe pass-through from the exchange rate to inf<\/span>lation appears to be manageable based on the analysis of the central bank and will only become a concern if the inflation target is at risk again,\u201d Mr. Neri said.<\/p>\n

\u201cHowever, it\u2019s still a limiting factor that will likely prevent the BSP from cutting interest rates aggressively, especially given the current account deficit that the country has,\u201d he added.<\/p>\n

Mr. Neri cited other risks such as the country\u2019s external position.<\/p>\n

\u201cCutting interest rates aggressively would make the buildup of (foreign exchange) reserves more challenging, which may lead to a further deterioration in the external position,\u201d he added.<\/p>\n

Mr. Guinigundo said the BSP should take into account the second-quarter gross domestic product data, which will come out on Aug. 8.<\/p>\n

\u201cAlthough difficult to estimate, a good idea of the output gap should be able to help guide the BSP in its decision to ease or maintain the policy rate and avoid premature or late adjustment, both of which could be costly to the economy,\u201d he said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A POSSIBLE BREACH in the inflation target this month will not derail the Bangko Sentral ng Pilipinas\u2019 (BSP) planned rate cut by August, its top official said.<\/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":[5912,5796,14644,2243,5806,1744,1477],"class_list":["post-19649","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-august","tag-bsp","tag-bworldonline","tag-cut","tag-hints","tag-rate","tag-still"],"yoast_head":"\nBSP still hints at rate cut in August - 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-still-hints-at-rate-cut-in-august\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP still hints at rate cut in August - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"A POSSIBLE BREACH in the inflation target this month will not derail the Bangko Sentral ng Pilipinas\u2019 (BSP) planned rate cut by August, its top official said.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/\" \/>\n<meta property=\"og:site_name\" content=\"Energy Buzz\" \/>\n<meta property=\"article:published_time\" content=\"2024-07-08T03:06:08+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#\\\/schema\\\/person\\\/344f8dbaaecf75e51367eef93f492892\"},\"headline\":\"BSP still hints at rate cut in August\",\"datePublished\":\"2024-07-08T03:06:08+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/\"},\"wordCount\":1131,\"publisher\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#organization\"},\"keywords\":[\"august\",\"bsp\",\"bworldonline\",\"cut\",\"hints\",\"rate\",\"still\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/\",\"url\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/\",\"name\":\"BSP still hints at rate cut in August - Energy Buzz\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#website\"},\"datePublished\":\"2024-07-08T03:06:08+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/bsp-still-hints-at-rate-cut-in-august\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/energybuzz.ph\\\/staging\\\/6915\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"BSP still hints at rate cut in August\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#website\",\"url\":\"https:\\\/\\\/energybuzz.ph\\\/\",\"name\":\"Energy Buzz\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/energybuzz.ph\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#organization\",\"name\":\"Energy Buzz\",\"url\":\"https:\\\/\\\/energybuzz.ph\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/energybuzz.ph\\\/staging\\\/6915\\\/wp-content\\\/uploads\\\/2023\\\/09\\\/EnergyBuzzLogo.png\",\"contentUrl\":\"https:\\\/\\\/energybuzz.ph\\\/staging\\\/6915\\\/wp-content\\\/uploads\\\/2023\\\/09\\\/EnergyBuzzLogo.png\",\"width\":1315,\"height\":656,\"caption\":\"Energy Buzz\"},\"image\":{\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#\\\/schema\\\/logo\\\/image\\\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/energybuzz.ph\\\/#\\\/schema\\\/person\\\/344f8dbaaecf75e51367eef93f492892\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"url\":\"https:\\\/\\\/energybuzz.ph\\\/staging\\\/6915\\\/author\\\/admin\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"BSP still hints at rate cut in August - Energy Buzz","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/","og_locale":"en_US","og_type":"article","og_title":"BSP still hints at rate cut in August - Energy Buzz","og_description":"A POSSIBLE BREACH in the inflation target this month will not derail the Bangko Sentral ng Pilipinas\u2019 (BSP) planned rate cut by August, its top official said.","og_url":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/","og_site_name":"Energy Buzz","article_published_time":"2024-07-08T03:06:08+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/#article","isPartOf":{"@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/"},"author":{"name":"admin","@id":"https:\/\/energybuzz.ph\/#\/schema\/person\/344f8dbaaecf75e51367eef93f492892"},"headline":"BSP still hints at rate cut in August","datePublished":"2024-07-08T03:06:08+00:00","mainEntityOfPage":{"@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/"},"wordCount":1131,"publisher":{"@id":"https:\/\/energybuzz.ph\/#organization"},"keywords":["august","bsp","bworldonline","cut","hints","rate","still"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/","url":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/","name":"BSP still hints at rate cut in August - Energy Buzz","isPartOf":{"@id":"https:\/\/energybuzz.ph\/#website"},"datePublished":"2024-07-08T03:06:08+00:00","breadcrumb":{"@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/energybuzz.ph\/bsp-still-hints-at-rate-cut-in-august\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/energybuzz.ph\/staging\/6915\/"},{"@type":"ListItem","position":2,"name":"BSP still hints at rate cut in August"}]},{"@type":"WebSite","@id":"https:\/\/energybuzz.ph\/#website","url":"https:\/\/energybuzz.ph\/","name":"Energy Buzz","description":"","publisher":{"@id":"https:\/\/energybuzz.ph\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/energybuzz.ph\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/energybuzz.ph\/#organization","name":"Energy Buzz","url":"https:\/\/energybuzz.ph\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/energybuzz.ph\/#\/schema\/logo\/image\/","url":"https:\/\/energybuzz.ph\/staging\/6915\/wp-content\/uploads\/2023\/09\/EnergyBuzzLogo.png","contentUrl":"https:\/\/energybuzz.ph\/staging\/6915\/wp-content\/uploads\/2023\/09\/EnergyBuzzLogo.png","width":1315,"height":656,"caption":"Energy Buzz"},"image":{"@id":"https:\/\/energybuzz.ph\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/energybuzz.ph\/#\/schema\/person\/344f8dbaaecf75e51367eef93f492892","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/136dede3a147ecd1a9946f78a827dcc4c82e31eece4650a789bbb3656cebe664?s=96&d=mm&r=g","caption":"admin"},"url":"https:\/\/energybuzz.ph\/staging\/6915\/author\/admin\/"}]}},"_links":{"self":[{"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/posts\/19649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/comments?post=19649"}],"version-history":[{"count":0,"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/posts\/19649\/revisions"}],"wp:attachment":[{"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/media?parent=19649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/categories?post=19649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/energybuzz.ph\/staging\/6915\/wp-json\/wp\/v2\/tags?post=19649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}