Goldman Sachs expects rate cut

Investment banking giant Goldman Sachs expects the Bangko Sentral ng Pilipinas (BSP) to cut key interest rates by 25 basis points (bps) on Thursday, Aug. 28, amid low domestic inflation and slower economic growth.

- By BEN ARNOLD DE VERA

In an Aug. 22 report obtained by Manila Bulletin, Goldman Sachs Economics Research noted that the 25-bp reduction in the BSP policy rate to five percent from the current 5.25 percent by Thursday is in line with market consensus.

“We continue to expect inflation to remain subdued in the remainder of 2025 as food prices inflation continues to be low, driven by rice prices,” Goldman Sachs said, citing July’s almost six-year-low rate of 0.9 percent year-on-year. The end-July headline inflation average of 1.7 percent is below the BSP’s twoto four-percent target band of manageable annual price increases deemed conducive to economic growth.