Deutsche Bank said that with inflation below 2-4% this year, Bangkok’s Sentral NG Pilipinas (BSP) could lower policy rates by 25 basis points (BP) monthly and August.
“Our basic case is to lower the tax rate by 25 p.m. at the upcoming June and August meetings,” Deutsche Bank research economist Junjie Huang said in a report.
The Monetary Commission resumed its cut rate cycle in April, reducing the benchmark rate by 25 basis points to 5.5%. Since the easing began in August last year, the central bank has reduced borrowing costs by 100 barrels.
Deutsche Bank said the risk of inflation violations violated the central bank’s 2-4% target “still limited.”
“The full-year inflation rate for 2025 is likely to be below the BSP’s target range of 2-4%.”
BSP expects inflation to average 2.3% this year. Title inflation slowed to 1.4% in April, bringing the four-month average to 2%.
According to a median estimate of 17 economists, inflation last month was 1.3%. BusinessWorld Last week’s poll. The government will release possible inflation data on Thursday.
BSP Governor Eli M. Remolona, Jr. Cooling inflation provides them with “enough space” to reduce costs this year, earlier said. He said they could cut two more tax rates This year, it is based on 25 basis points of “baby steps”.
The next policy review of the Monetary Commission will be held on June 19, followed by three meetings in August, October and December.
Deutsche Bank said the outlook for easing inflation at low prices will support the outlook for inflation.
It added: “Rice prices may remain low in amid global oversupply and subsidized rice per kilogram and a drop in rice tariffs in June 2024, and this will continue to work hard.”
In April, rice prices fell 10.9% after falling 7.7% in March.
According to the local Bureau of Statistics, the average price of regular rice fell to 13.3% to P44.45 in April, while the average price of mimi rice fell 10.4% to P50.54, and special rice fell 6.2% to P60.69 per kilogram.
“In addition, a decline in global oil prices may make the Philippines’ domestic fuel prices better,” Mr Huang said.
Among the oil producer group organised by the group organised by the group organised by the group organised by the group organised by the group, oil prices exceeded $1 per barrel on Monday, and decided to increase output in July in the same amount as the previous two months, a relief for those expected to have greater growth.
Brent crude futures climbed 2.33% or $1.46 to $64.24 by 6:26 GMT after falling 0.9% on Friday. The U.S. West Texas Intermediate crude oil was $62.45 per barrel, down 0.3% last time, up 2.73% or $1.66. Both contracts were down by more than 1% last week.
OPEC+ decided to increase production by 411,000 barrels per day in July on Saturday, and the group added it to the same amount in the third month as it hopes to fight back market share and punish overproducers. The group is expected to discuss a larger production rate hike.
Oil prices have been falling over the past few weeks as investors await the latest OPEC+ output announcement. – Luisa Maria Jacinta C. Jocson
