Finance Chief Recto Favors Early Interest Rate Cut

-


MANILA, Philippines - Finance Secretary Ralph Recto has expressed his support for an early interest rate cut by the Bangko Sentral ng Pilipinas (BSP), citing the government's need to raise funds at cheaper costs to pay off maturing debts, including those incurred during the pandemic era.


In an interview with the Inquirer, Recto stated that the market is likely prepared for whether or not a rate cut will occur at the Monetary Board's (MB) policy meeting on August 15. This comes after BSP Governor Eli Remolona Jr. indicated on Tuesday that a rate cut this month is now "slightly less likely" due to higher-than-expected inflation in July, although he did not rule out the possibility of an off-cycle easing.


As a member of the seven-person MB representing President Marcos' Cabinet, Recto believes there is a greater need for a rate reduction "more so now," arguing that the Philippines can afford to ease early amid signals of a September rate cut from the US Federal Reserve. "Regardless of whether the policy rate has been adjusted or not, the market is pricing it in already," the finance chief said.


Data released this week showed that inflation had accelerated to 4.4% in July, faster than the 3.7% recorded in June and the highest in nine months. While the latest reading fell within the BSP's 4 to 4.8% forecast range for July, it marked the first time this year that inflation had exceeded the central bank's 2- to 4-percent target band.


Although Remolona had already anticipated a breach of the inflation target due to base effects, he stated that the July price growth and the impact of data distortions were "slightly worse than expected." This could make it more expensive for the Marcos administration to refinance its old debts, with budget data showing the government would spend P876.7 billion on debt payments next year, including interest expenses for pandemic borrowings that are falling due soon.


Recto noted that even concessional borrowings extended by multilateral agencies like the World Bank have become more costly in the high-interest rate environment. Moving forward, he said the government would continue to tap the commercial debt market at the right time to help pay off its old liabilities. "The idea is to borrow at the cheapest rates. But essentially, they (Bureau of the Treasury) know what they're doing. And they know when to time the market," he added.


Read: VP Sara Duterte Criticizes Government: "Filipinos Deserve Better"


Follow us on Facebook: The EpicNews

Comments

Post a Comment

Popular posts from this blog

Philippines Conducts Joint Patrols with US, Canada, and Australia

-
Image
MANILA, Philippines — The Philippines commenced two days of joint maritime and aerial exercises with the United States, Canada, and Australia on Wednesday, as outlined in a joint statement, amid ongoing territorial disputes in the South China Sea with China. These operations, taking place "within the Philippine Exclusive Economic Zone," aim to demonstrate the collective commitment of the four nations to enhance regional and international cooperation in support of a free and open Indo-Pacific. The exercises come at a time when China's aggressive posturing towards Taiwan and its claims over the South China Sea have raised concerns about a potential conflict that could involve the United States. China asserts sovereignty over the majority of the South China Sea, disregarding an international tribunal ruling that deemed its claims unfounded.  Last week, the Philippines conducted separate naval drills in the South China Sea, first with the United States and then with Japan tw
Read more

Philippines Ranks 32nd as of Today, in Paris Olympics Medal Standings 2024

-
Image
MANILA , Philippines —  The Philippines currently holds the 32nd spot in the medal standings at the 2024 Paris Olympics. This ranking comes after Carlos Yulo's impressive gold medal win in the men's floor exercise, marking a significant achievement for Team Philippines. Carlos Yulo's Historic Victory Carlos Yulo’s victory in the men’s floor exercise has brought immense pride to the nation, making him the first Filipino gymnast to win an Olympic gold medal. His performance has not only secured a prestigious spot in the Olympic history books but also elevated the Philippines' position in the overall standings. Ongoing Competitions Filipino athletes continue to compete in various events, with hopes of adding more medals to the country’s tally. EJ Obiena, currently ranked as the world’s No. 2 pole vaulter, is set to compete in the finals, presenting another opportunity for a podium finish. Additionally, boxers Aira Villegas and Nesthy Petecio are still in the running for m
Read more

Carlos Yulo to get millions and counting - worth of incentives after gold medal win

-
Image
Carlos Yulo is poised to receive significant rewards following his groundbreaking gold medal win in the men's floor exercise at the Paris 2024 Olympics. Yulo's victory marks him as the second Filipino athlete to secure an Olympic gold, following weightlifter Hidilyn Diaz , who achieved this milestone during the Tokyo 2020 Games. The 24-year-old gymnast’s life is set to change dramatically, as he will be granted a cash incentive of ₱10 million  from the Philippine Sports Commission, in line with Republic Act 10699, which outlines benefits for national athletes and coaches. In addition to the monetary reward, Yulo will also receive a  fully-furnished two-bedroom condo  worth ₱24 million  in McKinley Hill, courtesy of Megaworld. The President of the Philippine Olympic Committee, Bambol Tolentino, has promised to provide Yulo with a house and lot, similar to the rewards previously given to Diaz and other medalists from the Tokyo Olympics, including silver medalists Nesthy Petecio
Read more