MANILA: The Philippine central bank will consider one more rate cut this year - possibly in February - to close out its easing cycle, barring worse-than-expected economic growth, according to its governor.
The key rate is "very close to where we want” it to be, Bangko Sentral ng Pilipinas Governor Eli Remolona said at a briefing in Manila on Tuesday (Jan 6).
"The Monetary Board views the monetary policy easing cycle as nearing its end. Any further easing is likely to be limited and guided by incoming data,” the central bank also said in a separate statement.
The latest pronouncements come after the Philippines’ headline inflation accelerated to 1.8% in December, beating the 1.4% median estimate of analysts polled by Bloomberg. The slight uptick was due to a typhoon that disrupted food production, sending prices of vegetables and fish higher, the Philippines’ Economic Planning department said.
Remolona said he expects inflation to quicken slightly this year but still stay within the 2%-4% target range. The BSP also reiterated that while the economic outlook has dimmed, domestic demand is set to rebound gradually due to the impact of lower interest rates and improved public spending.
The central bank estimates gross domestic product growth at 4.6% in 2025, then improving to 5.4% this year. If growth goes below 5% in 2026, there could be grounds for one more rate cut beyond the 25-basis points that’s "currently priced in,” the governor said. - Bloomberg
