Philippine central bank Governor Eli Remolona said that an interest rate cut during the current year is possible, but noted that a similar decision by the financial regulator in the first half of 2024 is unlikely.

Mr. Remolona made the corresponding statement on the sidelines of the central bank’s event on Friday, January 26, in response to a question from journalists about when monetary policy norms could be softened.

The Bangko Sentral ng Pilipinas chief in the context of reflections on a possible interest rate cut, adheres to a restrained point of view, despite the slowdown in inflation against the background of continuing price threats, including the cost of rice.

Currently, the key interest rate of the central bank of the Philippines is close to a 17-year high of 6.5%. The financial regulator, against the background of economic realities that cannot be described as positive, has launched an aggressive campaign to tighten monetary policy to try to counter the challenges of modern times.

Eli Remolona said that Southeast Asian economic growth in the fourth quarter of 2023 was probably better than the quarter before.

Philippine Finance Minister Ralph Recto said on Friday that he expects interest rates to decrease, noting the market consensus in this context. In his opinion, the relevant decision will be made by the central bank of the country in the second half of 2024.

Eli Remolona also separately stated that the financial regulator would like to improve its monetary policy framework by modernizing its research and models to better respond to price pressures, especially during periods of supply shock. He noted that the central bank is committed to strengthening systemic risk supervision and deepening capital markets to diversify sources of financing.

As we have reported earlier, Philippines Seeks to Actively Use AI.