LOWER inflation rates could prompt monetary authorities to continue lowering the Bangko Sentral ng Pilipinas' (BSP) policy rate over the next two years.
LOWER inflation rates could prompt monetary authorities to continue lowering the Bangko Sentral ng Pilipinas' policy rate over the next two years.The central bank's policymaking Monetary Board began easing last month, ordering a 25-bps cut that brought the target reverse repurchase rate to 6.25 percent, and preliminary results from a BSP survey of external forecasters showed that most expect another 25-bps reduction before the year ends.
Analysts now expect inflation to drop to 3.5 percent this year, lower from the previous projection of 3.7 percent. For 2025 and 2026, they saw the rate hitting 3.1 percent and 3.2 percent, respectively, closer to the midpoint of the target range.Downside risks to the inflation outlook were primarily attributed to lower rice prices, due to Executive Order 62 that slashed tariffs on imports of the staple to 15 percent from 35 percent.
See Rate Cuts For The Next Two Years
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