PHILIPPINE Finance Secretary Ralph Recto cautioned that his nation may see a delay in interest-rate cuts should the peso weaken past the record low of 59 per us dollar, though that would not damage the economic growth outlook.

“Even if we hold off in reducing interest rates, we expect the Philippine economy to still grow between 6 per cent to 7 per cent this year,” Recto said in an interview Friday with Bloomberg Television in Washington, where he was attending spring meetings of the International Monetary Fund and World Bank.

Recto is part of Bangko Sentral ng Pilipinas’ seven-member policymaking board. He spoke after the peso fell past the closely watched 57-per-dollar level for the first time since 2022 – part of a broader drop in risk assets in the wake of Federal Reserve Chair Jerome Powell’s Apr 16 signal of delays in US rate reductions.

Policymakers across the world, including in the Philippines, have indicated they are not in a rush to lower borrowing costs, and want to see more evidence of firmly decelerating price pressures before pivoting to easing. 

BSP Governor Eli Remolona has maintained a broadly hawkish stance and stuck to guidance that further monetary tightening is unlikely, saying the peso’s weakness is mostly due to dollar strength.

The Philippines, which has investment-grade sovereign credit ratings, also wants to broaden the base of its bond investors as it looks to fund a budget deficit of about 1.5 trillion pesos (S$35.5 billion) in 2024 and support economic growth.

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Debt issuance

Recto said Friday that the government plans to tap international debt markets for about 25 per cent of its borrowing and probably will be “in the market early on.”

“That’s roughly about US$9 billion, this year until 2028 more or less,” Recto said. BLOOMBERG