BSP gains room to further hike policy rate–Nomura

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MANILA, Philippines – The rebound in government spending in April could give the Bangko Sentral ng Pilipinas (BSP) more room to raise interest rates to combat war-driven inflation without placing too much strain on economic growth, according to Nomura Global Markets Research.

In a research note, Nomura said there’s now “light at the end of the tunnel” after the sharp fiscal tightening seen following a confidence shock triggered by a major corruption scandal.

READ: Jumbo rate hikes seen despite anemic growth

“On monetary policy, this allows BSP to focus on containing inflation risks,” the bank said, adding that it still forecasts the BSP to hike by another 75 basis points this year to 5.25 percent, starting with a quarter-point increase at its next meeting in June.