Philippines Central Bank releases overnight borrowing rate

The Central Bank of Philippines (BSP) will today release its overnight borrowing rate.

Manilla’s inflation increased at the start of the year due to surges in commodity prices and setbacks in the global supply chain. This was accompanied by the devaluation of its national currency—the Philippine peso—leading to low-income households struggling to afford imported goods. Despite the increase from last month, the BSP is preparing to keep its overnight borrowing rate on hold at 6.50% following today’s meeting.

Expect the BSP to continue to keep the policy rate at its current level until at least the final quarter of 2024. This is partly because the current rate is still within the BSP’s target range of 2-4%, therefore, the BSP wants to refrain from acting too soon. The BSP wants to balance the requirements to boost the currency while also increasing economic growth. Moving forward, expect the Philippine peso to bounce back from its current stage by roughly 10% against the US dollar during the short-to medium-term. Net exports—such as textile and stee—will account for much of that growth.