In a press briefing, the BSP chief replied to a query about the timing of the central bank’s long anticipated rate cuts saying that an easing in August is “somewhat more likely than before.”
“We’re on track to cut in the third quarter,” he added, saying that it is possible for the Monetary Board to order a 25-basis point cut in the third quarter, and another of the same magnitude in the fourth if inflation data warrants it.
This announcement follows the BSP's decision on Thursday to maintain the overnight rate at 6.5%. The move reflects a shift in inflation risks to the downside for 2024 and 2025, driven by lower import tariffs on rice under a recent executive order by President Marcos.
Although higher prices for non-rice food items, transport charges, and electricity rates present some inflationary pressures, forecasts show inflation easing to 3.1% for both 2024 and 2025, down from previous estimates.
The Monetary Board noted strong domestic output growth, supported by a robust labor market and healthy net exports.
