Department of Finance Secretary Ralph Recto said the Philippines can expect two more 25-basis-point (bps) reduction in Bangko Sentral ng Pilipinas’ key interest rates, for a total of 50 bps, for the rest of the year.
Recto said these rate cuts are possible because of the stable inflation outlook, echoing the position of the Bangko Sentral ng Pilipinas (BSP) that there is room for more cuts due to the easing cycle of inflation.
Recto noted, however, the final Monetary Board action would also depend on what would happen with the situation in the US.
“I think we have room to cut. Maybe not two, [but it] depends on what happens in the US as well. But as of today, I would assume that we’re okay for two rate cuts,” said Recto.
The cut down its key interest rates by 25 bps on June 19, citing a moderated outlook on inflation.
This reduced the BSP’s target reverse repurchase rate to 5.25 percent, with adjusted interest rates on overnight deposits at 4.75 percent and on lending facilities at 5.75 percent.
