In a press statement, Bank of the Philippine Islands lead economist Emilio Neri Jr. said the BSP has room for further monetary easing in the first half of 2025, provided no significant supply shocks disrupt the inflation trajectory.
He noted that Philippine inflation is likely to stay within the BSP’s target range, supported by improved global rice production and stable commodity prices amid economic slowdowns in major economies like China.
Neri highlighted several global factors that could aid in curbing inflation. These include expanding US oil production under the incoming administration of President Trump, which may dampen fuel costs, and China’s surplus manufacturing capacity, potentially leading to lower import prices for the Philippines.
However, he cautioned against aggressive rate cuts in the latter half of 2025, citing potential risks from shifting global economic conditions. He emphasized that geopolitical developments, such as inflationary policies in the US or higher global tariffs, could reignite inflation, forcing central banks worldwide to reconsider monetary easing.
While the Federal Reserve is projected to ease rates next year, the magnitude has been scaled back, which could influence BSP’s policy trajectory.
Neri forecasts that the BSP may cut rates by another 50 basis points in 2025 but will tread cautiously to maintain stability amid global uncertainties.
This measured approach aims to balance domestic economic growth and price stability, ensuring the Philippines remains resilient against external shocks.
