The monetary policy tightening in the Philippines is now over, with no further rate hikes expected for the rest of the year, according to Maybank.
Falling inflation has given central banks in ASEAN countries, including the Bangko Sentral ng Pilipinas (BSP), more flexibility to pause or even cut policy rates.
However, the Philippines is constrained from decoupling from the US Federal Reserve due to weaker external buffers.
Meanwhile, Moody’s Analytics noted that the easing inflation in the country indicates that the BSP’s past rate hikes have been effective.
On the other hand, Nomura ranked the Philippines at the bottom in terms of its ability to decouple from the US Fed, primarily due to its wider current account deficit.
Nomura expects the BSP to begin its cutting cycle in March next year, with a similar stance to former central bank chief Felipe Medalla.
