Economists see hefty rate cuts

With the Bangko Sentral ng Pilipinas (BSP) resuming cuts on borrowing costs, private-sector economists expect the central bank to slash the key interest rate by an additional three-quarter point by the end of 2025.

- DERCO ROSAL

This followed the Monetary Board (MB) decision to reduce the policy rate by 25 basis points (bps) to 5.5 percent, from 5.75 percent previously, even as BSP Governor Eli M. Remolona Jr. gave no indication of the magnitude of cuts the MB would deliver this year.

Miguel Chanco, chief emerging Asia economist at the think tank Pantheon Macroeconomics, said that the MB—the BSP’s highest policy-making body—has “clearly turned more dovish” with its latest move.

The BSP’s rate cut is seen supporting Philippine growth amid global headwinds such as the United States’ (US) tariffs, which the central bank said earlier could slow global gross domestic product (GDP) growth and pose risks to the local economy.