Economists split on BSP policy move

Economists are divided on whether the Bangko Sentral ng Pilipinas (BSP) will deliver another rate cut this week or hold fire, as the Monetary Board convenes on Oct. 9 against a backdrop of subdued inflation and still-soft growth momentum.

- KEISHA TA-ASAN

Union Bank of the Philippines chief economist Ruben Carlo Asuncion expects the Philippine central bank to trim policy rates by 25 basis points (bps).

“We expect the Monetary Board to cut policy rates by 25 bps on Oct. 9 to preempt downside risks to growth amid benign inflation,” Asuncion said.

“Looking ahead, we see a cumulative 50 to 75 bps easing through early 2026, with the policy rate likely bottoming out around 4.50 to 4.75 percent, assuming no major supply shocks,” Asuncion added.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas shared a similar view, saying the BSP has room to ease further to support economic activity.

Ravelas also projected a 25-basis-point reduction this week.

With the policy rate currently at five percent after a series of cuts totaling 150 bps since August 2024, the Oct. 9 decision is shaping up as a key test of how much room the central bank still has to ease without unsettling market expectations or external stability.