BSP signals 2 more rate cuts in ’25
The Bangko Sentral ng Pilipinas expects at least two more rate cuts this year, citing plenty of room for monetary easing amid cooling inflation and a more stable external environment.
BSP Governor Eli Remolona Jr. said in a briefing on Friday that the projected reductions in the benchmark interest rate would likely be implemented gradually, with each cut at 25 basis points.
Inflation
In April, the Monetary Board (MB) lowered the overnight rate, the benchmark banks use to price loans, by a quarter point to 5.5 percent.
Remolona said the latest economic data indicates that inflation should stay well within its target 2- to 4-percent range for the year.
Thus, the central bank can proceed with easing policy rates without risking price stability.
Inflation eased to 1.4 percent in April, from 1.8 percent in March, on the back of slower price increase in food and lower transport costs.
It also settled within the 1.3 to 2.1 percent forecast range of the BSP for last month.
Remolona also acknowledged the impact of government efforts outside of monetary policy in helping manage inflation.
“I don’t want to speak about specific policies, but we find that what we call the nonmonetary measures that the administration is putting in place, they seem to help with inflation,” he said.
The next Monetary Board meeting is scheduled for June 19, followed by three more sessions on Aug. 28, Oct. 9 and Dec. 11.
