BPI sees 50-point BSP rate cut unlikely

The Bangko Sentral ng Pilipinas is unlikely to implement a 50-basis-point rate cut despite the weak third-quarter growth, since a larger reduction could send the wrong signal and could signify a weak peso, according to Bank of the Philippine Islands (BPI) president and CEO Jose Teodoro Limcaoco.

- By MARCO LUIS BEECH

Pointing out that veering from the traditional 25-basis-point cut would be drastic, Limcaoco said it is also important to watch the actions of the US Federal Reserve prior to adjusting the benchmark interest rate.

“I personally don’t think we would do a 50-basis-point cut,” he told reporters. “It's drastic. It might send the wrong signal. And you have to look at what the Federal Reserve is doing because if you cut significantly faster than the Fed, that means a weak peso.”

Last October, the BSP reduced its benchmark interest rate by 25 basis points, citing weak domestic demand and concerns over governance issues in public infrastructure spending.