BSP announces more rate cuts possible this year

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. indicated that more interest rate cuts are “possible” for the remainder of the year.

“We have a policy meeting in October and another in December. So, a 25-basis-point cut in each meeting is possible, in principle,” Remolona said on the sidelines of a forum at the Asian Development Bank (ADB) last week.

In its previous meeting last August, the BSP’s Monetary Board reduced the key interest rate by 25 basis points, bringing it down to 6.25 percent.

The BSP has highlighted that risks to inflation are leaning toward the downside for both this year and 2025.

Headline inflation dropped to 3.3 percent in August, down from 4.4 percent in July.

The Philippine Statistics Authority is set to release September inflation data on October 4.

“We need to look at the numbers. It’s not just the most recent data that will determine our decision. The September inflation figure, which will be released next week, is just one input into our overall projections,” Remolona explained.

“What matters most to us is the inflation outlook for the coming year, as the effects of monetary policy take time to materialize. That’s the number we focus on.”

He added that headline inflation could ease further in September.