BSP expected to cut rates by 25 bps anew

The Bangko Sentral ng Pilipinas (BSP) is widely expected to bring down its key policy rate by 25 basis points (bps) at its upcoming Monetary Board meeting on Thursday, according to a poll of analysts conducted last week.

- By KEISHA TA-ASAN

UnionBank chief economist Ruben Carlo Asuncion said he sees another 25-bp rate cut from the BSP, which would bring the benchmark rate to 5.75 percent from the current level of six percent.

"Inflation staying within the BSP's target is one of the main reasons why we think that the BSP will consider a cut. If the US Federal Reserve does deliver its own 25 bps, we believe that the BSP will all the more consider cutting key interest rates," he said.

Headline inflation quickened to 2.5 percent in November from 2.3 percent in October, marking its second straight month of increase. This brought average inflation for January to November to 3.2 percent.

In a commentary, BPI lead economist Jun Neri said while a pause is possible this week, it is more likely for the BSP to cut rates by 25 bps given recent economic data and external developments.

"The inflation outlook for 2025 supports the case for a rate cut," Neri said. "Despite consumer prices rising at a faster pace in November, inflation remains well within the target."