Inflation below target, BSP to cut rates anew

Private sector economists believe the Bangko Sentral ng Pilipinas (BSP) has room for two more cuts in key borrowing rates, following four straight months of inflation staying below the government's target band of two to four percent, and amid continued risks of economic underperformance.

- BY DERCO ROSAL

"Given that the latest inflation reading remained below the central bank's inflation target range for the fourth consecutive month and domestic growth is still subject to downside risks, there is scope for the BSP to further loosen its monetary policy in the second half of 2025," Singapore-based United Overseas Bank (UOB) said in a commentary released last Friday, July 4.

Last week, the Philippine Statistics Authority (PSA) reported that annual consumer price increases inched up slightly to 1.4 percent in June, reversing the downward trend seen since March. Excluding May's 1.3-percent inflation rate, the June figure remained the slowest in nearly six years, or since November 2019.

Since slipping below the twoto four-percent inflation target from February's 2.1 percent, headline prints have never clocked in above the target. It stood at 1.8 percent in March, then continued falling to 1.4 percent in April, and 1.3 percent in May.