One more interest rate cut in Q4

Amid United States (US) tariff pressures, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. said the central bank could keep policy rates on hold for up to a year if economic conditions and the outlook remain unchanged.

- BY DERCO ROSAL

“The timeframe we’re looking at is one year. So if we want to hold it, we’ll hold for-[if] the data for the outlook stays the same, then we’ll hold for the rest of the year,” Remolona said in a Bloomberg interview on Friday, Aug. 29.

Meanwhile, private-sector economists have priced in a mix of dovishness and caution for the succeeding period, given the central bank’s signals of a still accommodative stance but now less dovish.

British banking giant HSBC believes bringing the key lending rate to five percent has placed the monetary policy at a neutral stance—“it neither stokes inflation nor growth.” But given the latest signals from Remolona, the bank’s previous shift to a more dovish outlook has slightly tilted to a less dovish tone, too.

“We expect the BSP to be data dependent in the next few rate-setting meetings wherein the decision to cut policy rates or not will depend on market surprises in terms of inflation and growth,” HSBC Association of Southeast Asian Nations (ASEAN) economist Aris Dacanay said in an Aug. 29 commentary.

Dacanay recently shifted his outlook from cautious to more dovish, asserting the central bank has room to accelerate and deepen its monetary easing cycle until early next year on the back of favorable consumer price trends.

Looking ahead, Dacanay retained his expectations but with a caveat.