ANZ Research predicts that the Philippines' economic growth could be hindered by the need for households and corporations to rebuild depleted savings, potentially outweighing the impact of monetary policy easing.
Skyscrapers, both old and new, are mirrored in a river in Pasay City, symbolizing the Philippines’ evolving urban landscape amid a changing economic climate.
The BSP earlier said it will maintain an easing posture next year, but it considers a 100-basis-point reduction in key policy rates as “excessive,” as inflation could rear its ugly head again in 2025. . ANZ Research said that the specific target is to reduce it to 59.8 percent GDP from 61.3 percent at the end of the third quarter of 2024.
“On balance, the 2025 projected fiscal stance will not offer much resilience against the emerging macro headwinds. Relaxing this stance will be politically challenging and time consuming,” ANZ Research said. Despite the increases in education spending and social services through the national budget, ANZ Research said these will be outweighed by the postponed passage of new taxes last year.
ECONOMY PHILIPPINES SAVINGS INTEREST RATES GDP GROWTH
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