BAGUIO: The Philippine central bank could cut its key policy rate by at least at least 50 basis points this year to support economic growth and with inflation expected to stay within its target range this year, its governor said on Saturday.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said the central bank’s benchmark rate, which currently stands at 5.75%, could be reduced by 25 basis points in the first half, and another 25 basis points in the second half.
“That is my baseline,” Remolona told reporters.
On Friday, Remolona said a cut was “on the table” when the central bank’s monetary board meets to review policy rates on Feb. 13.
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Remolona said a 100 basis point reduction in policy rates was out of the question at the moment because he does not see a hard landing for the Philippine economy which grew a slower-than-expected 5.2% in the last three months of 2024.
To support growth, Remolona also said the central bank was discussing cutting banks’ required reserves by 200 basis points to 5%, with the reduction to happen possibly in the middle of the year.
BSP projects inflation to average 3.3% in 2025, within its 2% to 4% target for the year, slightly higher than last year’s 3.2% rate.
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