BSP: Three more rate cuts unlikely this year

The central bank has ruled out three policy rate cuts this year, as Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said two remain "more likely" than just one, depending on economic data.

- Keisha Ta-asan

"Three is unlikely. That's beyond what we see as the Goldilocks rate and the output gap," Remolona told reporters on the sidelines of the Economic Journalists Association of the Philippines (EJAP) Economic Forum 2025 yesterday.

The Goldilocks rate, he explained in previous briefings, is the level of interest rates that is just right — high enough to keep inflation in check, but low enough to support economic growth.

Headline inflation slowed to 0.9 percent in July from the previous month's 1.4 percent and the 4.4 percent registered in the same month last year. It marked the slowest pace in almost six years and was below the BSP's two to four percent target.

On the other hand, the Philippine economy posted a 5.5-percent gross domestic product (GDP) growth in the second quarter. This was slightly faster than the 5.4 percent growth in the first quarter, but still slower than the 6.5 percent print a year ago.

The BSP chief said an August rate cut is "quite likely," even with core inflation edging up.