EIU sees 2 more BSP rate cuts

Despite recent pronouncements by the Bangko Sentral ng Pilipinas (BSP) that one more policy rate cut before year-end would maintain the “Goldilocks” level, the Economist Intelligence Unit (EIU) still forecasts two more reductions at each of the two remaining Monetary Board (MB) interest rate decisions.

- By BEN ARNOLD DE VERA

“We expect the BSP to continue the monetary easing cycle at its remaining meetings this year in October and December,” EIU Asia analyst Kalyani Honrao and Asia-Pacific regional director Alex Holmes said in a Sept. 1 report obtained by Manila Bulletin.

“We maintain that the central bank will continue to undertake a 25-basis-point (bp) cut in each meeting, which would take the policy rate to 4.5 percent by year-end,” EIU said.

This end-2025 terminal policy rate has consistently been EIU’s forecast even before BSP Governor Eli M. Remolona Jr. last week signaled possibly only one more 25-bp reduction before year-end.