With US tariffs now agreed, however imbalanced the final outcome, a note of stability and predictability returns. Yes, it may well take several months for the full impact to become clear, but at present the headline figures are either stable or improving. We anticipate GDP growth that meets or exceeds 2024’s statistics, and at least one, maybe more, interest rate cuts before year end.
Inflation & Interest Rates
After cutting the policy rate to 5.25% in June, as we anticipated the Bangko Sentral ng Pilipinas (BSP) on cut it further on 28th August to 5.00% - the lowest level since November 2022. The next BSP meeting is scheduled for 28th August and we anticipate a further rate cut. In our July report we forecast this cut, stating it was strongly linked to BSP inflation forecasts – the BSP had recently revised its 2025 forecast down from 2.4% to 1.6%, with May’s inflation figure at 1.3% being the lowest since November 2019. Since then, inflation has eased even further to 1.4% in June ...
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