The Philippine economy could still reach the 6% growth objective in 2024, even if the central bank slashes rates later than previously forecast.

This is the view of Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda), who added that the GDP growth target of 6-7% for this year has already considered the chance of rates remaining higher for longer.

"When we looked at the 6 to 7%, that's more or less already given because we know that the interest rates have at most five quarters of impact down the road," Balisacan stated.

"The result of the policy actions last year are expected to be felt this year," he went on to say.

Balisacan's optimism contrasts with the pessimistic outlook of some economists, who view high borrowing costs as a significant obstacle to the government's goal of achieving 6% growth.

This is because a high-interest rate environment could limit financing options for both household activities and business expansion plans, Business Inquirer reports.

Up to now the Bangko Sentral ng Pilipinas (BSP) has maintained its key rate at 6.5%, the tightest in nearly 17 years. The central bank's decision to remain hawkish is driven by persistently high inflation, which could potentially exceed the BSP's target range of 2-4% once again.

BSP governor Eli Remolona Jr. has acknowledged that the space for easing monetary policy has diminished. He hinted at the possibility of delaying a rate cut until the first quarter of 2025 if inflation continues to pose challenges.

The Philippine Statistics Authority will publish the inflation data for April on 7th May. Balisacan is optimistic that the price growth for this month will be "close" to the 3.7% recorded in March, despite the volatility in global oil prices due to conflicts in the Middle East.

"What we are watching is the 2 to 4% target for the year because inflation can go up, go down, but what we want is to keep that within the band so that there will be not much instability in the market," Balisacan stated.