Private sector analysts are predicting that the Bangko Sentral ng Pilipinas (BSP) may raise its policy rate up to 8 percent this year due to inflation expectations for 2023 until 2025, with possible rate cuts in 2024 and 2025.
According to the central bank’s latest Private Sector Forecasts survey in February, economists expect the benchmark rate to increase by as much as 250 basis points this year.
The central bank has already raised the borrowing rate by 50 basis points to 6 percent, as anticipated.
Analysts also forecast a 6 percent inflation for 2023, lower than BSP’s own forecast of 6.1 percent.
Meanwhile, surveyed analysts forecast inflation will drop to 4 percent in 2024 and reach an average of 4.1 percent by 2025.
The central bank expects elevated inflation until October of this year and expects inflation to be at 3.1 percent by next year.
BSP Governor Medalla hinted that they could increase the key rate by another 50 bps in the next policy meeting, following the 50bps hike on February 16.
