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Bangko Sentral expected to hold rates despite Q3 GDP slide

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Enrico Dela Cruz, Reuters

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/news/10/03/20160614-dof-bspbuilding-jc-6.jpg"/><figcaption>Bangko Sentral ng Pilipinas Headquarters in Manila. <em>Jonathan Cellona, ABS-CBN News</em></figcaption></figure></div><p>MANILA - The Philippine central bank is expected to hold interest rates steady on Thursday, with liquidity in the economy still ample and despite a deeper-than-expected contraction in third-quarter gross domestic product, a Reuters poll found. <br/> <br/>Nine of the 11 economists surveyed predicted the Bangko Sentral ng Pilipinas (BSP) will leave the interest rate on its overnight reverse repurchase facility unchanged at a record low of 2.25 percent for a third straight meeting on Nov. 19. <br/> <br/>Two economists forecast a 25-basis point rate cut, which would be the fifth this year, after the BSP slashed rates by a cumulative 175 bps reduction between February and June to resuscitate the coronavirus-hit economy.<br/> <br/>Despite the unprecedented monetary policy support, including reductions in banks&#x27; reserve requirements, the economy shrank by more than expected in the third quarter on an annual basis, hit by weak demand and a slowdown in government spending.<br/> <br/>What the economy needs is &quot;a more forceful&quot; fiscal support, said Nicholas Mapa, ING&#x27;s senior economist for the Philippines.<br/> <br/>While not forecasting a rate cut on balance, Mapa does not completely rule out further easing either through a cut in reserve requirements or the policy rate on Thursday. <br/> <br/>The BSP has one more policy review before the year ends, slated for Dec. 17.</p><p>HSBC economist Noelan Arbis said he did not expect the central bank to do more for the rest of the year, given &quot;the absence of a big-ticket stimulus from the government&quot;. </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/video/business/11/06/20/bsp-ph-in-good-position-regardless-of-us-election-outcome">BSP: PH in good position regardless of US election outcome</a></li></ul><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/mJMzAs_Ze4A?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

<p>The Philippine central bank is expected to hold interest rates steady on Thursday, with liquidity in the economy still ample and despite a deeper-than-expected contraction in third-quarter gross domestic product, a Reuters poll found. </p>

The Philippine central bank is expected to hold interest rates steady on Thursday, with liquidity in the economy still ample and despite a deeper-than-expected contraction in third-quarter gross domestic product, a Reuters poll found.

Bangko Sentral expected to hold rates despite Q3 GDP slide

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Bangko Sentral expected to hold rates despite Q3 GDP slide

Enrico Dela Cruz,

Reuters

Published Nov 19, 2020 09:58 AM PHT

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