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Manila Bulletin devider Business devider Recto expects lower interest rates in second half

Recto expects lower interest rates in second half

Published Jan 28, 2024 12:58 am

At A Glance

  • Finance Secretary Ralph G. Recto expects a decrease in interest rates in the second semester of the year, both domestically and offshore.<br>Rector said this projection is based on the expected slowdown in the rate of consumer prices, or inflation.<br>The government has targeted an inflation rate of 2.0 percent to 4.0 percent for 2024.<br>Recto noted that the projected deceleration in interest rates will depend on external conditions throughout the year.<br>- Recto assumed the role of finance secretary on Jan. 15 and represents the government on the seven-member policymaking monetary board of the Bangko Sentral ng Pilipinas (BSP).

Finance Secretary Ralph G. Recto said that interest rates would go down in the second semester of the year.

On the sidelines of the annual reception for the banking community late Friday, Jan. 26, Recto stated that he expects a decrease in the cost of borrowing, both domestically and offshore, between July and December this year. 

This expectation is based on the projected slowdown in the rate of increase in consumer prices, or inflation.

“We expect interest rate to go down in the second,” the finance chief told reporters. “So far, the market consensus is that inflation and interest rates will decrease, globally, in the US and the Philippines.”

The government has set an inflation rate target of 2.0 percent to 4.0 percent for 2024.

Recto, however, noted that the projected deceleration will be subject to the prevailing external conditions throughout the year.

Recto assumed the role of finance secretary last Jan. 15 and represents the government on the seven-member policymaking monetary board of the Bangko Sentral ng Pilipinas (BSP).

Last December, the Monetary Board decided to hold its benchmark rate at a 16-year peak of 6.5 percent for the second consecutive meeting.

Between May 2022 and October 202,  the central bank implemented a series of increases, totaling 450 basis points, in borrowing costs to manage inflation.

Meanwhile, the finance chief assured that more investments, better streamlining of projects and faster budget execution would address inflation concerns.

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Department of Finance (DOF) interest rates ralph recto
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