Larger' BSP rate cuts seen

The Economist Intelligence Unit (EIU) still expects jumbo interest rate cuts by the Bangko Sentral ng Pilipinas (BSP) for the rest of 2025 as monetary authorities are seen prolonging the easing cycle.

- By BEN ARNOLD DE VERA

“We expect the BSP to continue cutting rates at each of its remaining meetings this year in August, October and December,” EIU Asia analyst Kalyani Honrao and Asia-Pacific regional director Alex Holmes said in a June 19 report obtained by Manila Bulletin.

As EIU projected 25 basis points (bps) each in interest rate reductions at the last three policy stance meetings of the BSP’s Monetary Board (MB), the key interest rate is seen dropping to 4.5 percent by end-2025, from 5.25 percent at present.

The MB last week further lowered the policy rate by 25 bps, citing the need for “a more accommodative monetary policy stance.”