BSP poised to ease policy rates further

IN POLL OF BANK ECONOMISTS

- By KEISHA TA-ASAN

The Bangko Sentral ng Pilipinas (BSP) will likely continue its monetary easing cycle as analysts expect the Monetary Board to cut borrowing costs by 25 basis points in its upcoming meeting this week.

HSBC economist for ASEAN Aris Dacanay said the BSP would likely lower interest rates by a quarter of a percentage point on Oct. 16, bringing the key policy rate down to six percent.

"Monetary policy is on the move in the Philippines. The Fed's surprise 50-basis-point rate cut in September opened the door for the BSP to quicken its easing cycle," Dacanay said.

According to Dacanay, the improving inflation outlook would provide the BSP room to ease policy further in the coming meetings and in 2025, especially with inflation falling to 1.9 percent in September.

India's decision to lift its export curbs on rice is also expected to bring further relief to the Philippines, where rice accounts for nine percent of the consumer price index (CPI) basket, Dacanay said.