BSP rate cut likely as inflation slows

Economists expect 25-bps cut on Thursday

- By KEISHA TA-ASAN

Analysts said the BSP's Monetary Board would likely slash borrowing costs by 25 basis points (bps) on Thursday, bringing the key policy rate to 5.5 percent from the current 5.75 percent.

"Progress on the inflation front will boost the central bank's confidence to resume cutting rates," said Sarah Tan, economist at Moody's Analytics. "The latest March print, which was the softest since May 2020, will be a prompt nudge."

Headline inflation cooled to 1.8 percent in March from 2.1 percent in February, falling at the lower end of the BSP's forecast range of 1.7 to 2.5 percent for the month. This offers enough room for the central bank to act, especially as inflation expectations ease and growth risks rise.

"Further monetary policy easing in the country will help reduce pressure on households' budgets, bringing some relief to the domestic economy amid a poorer trade climate as US tariffs mount," Tan said.