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October 02, 2023

BSP to raise benchmark rates to 3.25% this year via 5 rate hikes – ANZ

The Australia and New Zealand Bank sees the Bangko Sentral ng Pilipinas (BSP) aggressively raising interest rates in the second half of the year, bringing the benchmark rate to 3.25 percent by the end of 2022 from the current all-time low of two percent.

In its latest commentary titled “Philippines: Rising Offs of Earlier Monetary Policy Recalibration,” ANZ Research said the tightening by the central bank’s Monetary Board would kick off in June with 25 basis points, followed by similar rate hikes in August, September, November, and December as upside risks to inflation forecasts have become more prominent with higher oil prices.

“The inflation equation has made matters more complicated, which in our view, cannot be left unaddressed by the authorities for a prolonged period. As such, BSP officials have hinted that policy normalization will commence in H2, but we think that an earlier start will be necessary. The tightening cycle will also need to be a deep one,” ANZ added.

Originally, ANZ penned two rate hikes in the fourth quarter that would bring the benchmark rate to 2.50 percent this year.

The research unit is now expecting the consumer price index (CPI) to average 4.2 instead of 3.9 percent this year after accelerating to four percent in March from three percent in February due to higher global oil prices brought about by Russia’s invasion of Ukraine.

For the second quarter alone, it expects inflation to average 4.6 percent, well above the central bank’s two to four percent target range.

“Against this backdrop of rising inflation, it will be challenging for the BSP to continue to maintain its pro-growth accommodative stance,” ANZ added.


PNB recognized during SSS’s 66th anniversary celebration

The Social Security System (SSS) has bestowed two prestigious awards upon Philippine National Bank (PNB), designating them as the “Best Collection Partner” for the Overseas Bank category and the “Best Disbursement Partner” for the Universal Bank category during the “Balikat ng Bayan” Awards (BBA) 2023 ceremony held at the SSS Main Office in Quezon City on September 8.

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