Recto says 25-bp cut likely in December

Finance Secretary Ralph G. Recto ruled out an “off-cycle” move on monetary policy easing despite weaker-than-expected third-quarter growth, but noted there is a high chance of a rate cut at the central bank’s next meeting.

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Finance Secretary Ralph G. Recto said “I’m not sure about an ‘off-cycle’ cut, but there’s a good chance for a rate cut before the end of the year.” BWORLDONLINE.COM

“I’m not sure about an ‘off-cycle’ cut, but there’s a good chance for a rate cut before the end of the year,” Mr. Recto told BusinessWorld on the sidelines of a Senate hearing on Thursday.

He said the Monetary Board is more likely to cut the key policy rate by 25 basis points (bps) at the Dec. 11 meeting.

Asked if there is a chance for a 50-bp cut, Mr. Recto said: “There’s always a chance. It all depends on what happens. But I think there’s a higher probability for a 25-bp cut.”

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Zeno Ronald R. Abenoja told BusinessWorld that they have not discussed any possible off-cycle monetary policy easing.

“I haven’t heard anything,” he said. “So, it’s probably just rumors. As far as I know, there are no discussions.”

In October, the BSP lowered borrowing costs by 25 bps to a three-year low of 4.75%. It has so far reduced the key policy rate by 175 bps since it began its easing cycle in August last year.