MANILA: The Philippine central bank is widely expected to continue its monetary easing cycle on Thursday (Aug 28) to support the economy from US tariff risks as inflation remained benign.
All 26 analysts surveyed by Bloomberg see the Bangko Sentral ng Pilipinas lowering its overnight target reverse repurchase rate by 25 basis points to 5%, the lowest in almost three years.
An August rate cut became "more likely” after inflation slipped to the lowest in nearly six years, BSP Governor Eli Remolona said earlier this month. He also signalled more reductions in the fourth quarter and next year.
While the economy grew slightly faster last quarter, weaknesses in industry, investments and export growth partly stemming from US President Donald Trump’s tariffs will likely convince monetary authorities to provide further policy support.
The BSP will "tap a period of soft inflation to take a more growth supportive stance,” said Radhika Rao, senior economist at DBS Bank Ltd.
Other central banks in the region including New Zealand and Indonesia have also taken dovish tilts to bolster their economies’ defences against the US trade war, especially with the Federal Reserve expected to cut its benchmark interest rate next month. - Bloomberg
