MANILA: Inflation could settle within the 2% to 4% target range of the Bangko Sentral ng Pilipinas (BSP) this year until 2026 barring any supply shocks, a condition that would be supportive of the central bank’s ongoing campaign to boost economic growth, says Metrobank Research.
In a commentary, Metrobank said it expects inflation to average 3.2% in 2024 and in 2025, although it noted that “demand-side” price pressures would increase as the BSP continues to reduce borrowing costs.
Sans any supply problems, the bank said inflation would average 3% in 2026.
Moving forward, Metrobank said a “target consistent” inflation path would clear the way for further easing, with a third rate cut likely on the table at the Dec 19 meeting of the policymaking Monetary Board.
“As the inflation projection continues to remain within target, Metrobank Research maintains its forecast of another 25 basis point cut in the BSP’s meeting in December, bringing down its year-end forecast for the reverse repurchase rate to 5.75% in 2024,” it said. — The Inquirer/ANN
