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September 24, 2023

Remolona hints at possible policy rate shift amidst Q2 GDP dip

Bangko Sentral ng Pilipinas Governor Eli Remolona hinted at maneuvering room for a rate uptick, dispelling concerns of economic contraction.

The second gross domestic product growth stumbled to 4.3%, trailing the robust 6.4% recorded in the first quarter.

Remolona, however, anticipates a third quarter resurgence, attributing the previous quarter’s sluggishness to distinct variables. The onus lies on a robust 6.6% expansion in the second half to fulfill the ambitious 6-7% full-year goal.

With an eye on preserving inflation below 4% by the fourth quarter, BSP maintains the latitude for benchmark rate adjustments and targets a 2-4% range for 2024-2025.

Remolona’s discourse delved into the significance of the neutral interest rate in shaping policy direction, as BSP holds the overnight rate steady at 6.25%.


Three rural banks merge to enhance financial stability

Three rural banks have successfully merged in a move aimed at bolstering their financial stability, as confirmed by the Bangko Sentral ng Pilipinas (BSP). The merger officially took effect on July 13, following the necessary regulatory approvals, as detailed in a circular letter signed by Bankero and BSP Deputy Governor Chuchi G. Fonacier on September 15.

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