BSP rate cuts likely to continue until 2026 - BMI

The Bangko Sentral ng Pilipinas (BSP) is likely to continue its monetary policy easing until next year on expectations of low inflation and slower economic growth amid concerns about corruption issues and uncertainties related to the United States’ trade policies, according to research and analysis firm BMI.

- By LOUELLA DESIDERIO

In a report, the Fitch Solutions unit said the BSP’s move to cut its policy rate by 25 basis points to 4.75 percent was unexpected.

The BSP decided to trim the policy rate further as it sees scope for a more accommodative monetary policy stance, citing a favorable inflation outlook and moderating domestic demand.

“Our takeaway is that the BSP is poised to frontload easing to support the economy.

As such, we now expect the BSP to cut by 25 basis points at its final meeting for this year in December to 4.50 percent and by another 50 bps in 2026,” BMI said.