EIU sees deeper BSP rate cuts

The Economist Intelligence Unit (EIU) sees jumbo rate cuts of up to 100 basis points (bps) from the Bangko Sentral ng Pilipinas (BSP) amid lingering drags that may keep economic growth below its full potential this year.

- By BEN ARNOLD DE VERA

In their latest report obtained by Manila Bulletin, EIU Asia-Pacific regional director Alex Holmes and Asia analyst Kalyani Honrao still expect Philippine gross domestic product (GDP) growth to improve only slightly, to 4.5 percent in 2026 from the post-pandemic low of 4.4 percent last year.

“The data also reaffirm our non-consensus view that the central bank will keep cutting rates in 2026, despite signaling it was close to the end of its easing cycle at its late 2025 meeting,” EIU said.

In particular, EIU forecasts the BSP to reduce the policy rate by 75 to 100 bps, from the current 4.5 percent.

Most economists expect a 25-bp reduction in key interest rates when the policy-setting Monetary Board (MB) decides on the monetary policy stance on Thursday, Feb. 19.