Rate hike pause seen following Q3 slowdown
PHILIPPINE monetary authorities will likely hold off from raising interest rates anew this Thursday following a third quarter economic slowdown, banking giants ING Bank and HSBC said.
“[U]ntil the Philippines GDP (gross domestic product) release, our house view had been for a 25 basis points ( bps) BSP ( Bangko Sentral ng Pilipinas) rate hike at the meeting next (this) week,” ING Bank Asia economist Prakash Sakpal said in a report released during the weekend.
“That’s now been revised change, probably through the the year,” he added.
Softening household spending was particularly alarming, the ING economist noted. to no rest of
Following last week’s announcement that third quarter economic growth had slowed to a three-year low of 6.1 percent, Socioeconomic Planning Secretary Ernesto Pernia admitted that the government was concerned over the slowdown in household consumption, particularly in terms of spending on food and other basic products.
- penditure grew by only 5.2 percent in the third quarter, slowing from 5.9 percent three months earlier. In particular, household spending on food grew by just 2.8 percent from 6.2 percent in the second quarter.
HSBC, meanwhile, also expects the Bangko Sentral’s policymaking Monetary Board to keep settings on hold this Thursday given the GDP growth
“We believe that the effectiveness of the government’s ‘non-monetary’
an opportunity to hold off on further policy tightening at its next policy meeting,” it said.
HSBC is referring to Administrative Order 13 — issued in September in a