The Bangko Sentral ng Pilipinas (BSP) has lowered its key policy interest rate by 0.25 percentage point to 4.75 percent, surprising many as inflation remains below target.
The Monetary Board cited a weakening outlook for domestic economic growth, partly due to concerns about public infrastructure spending and moderating demand.
BSP Governor Eli Remolona Jr. stated that the stock market's decline and reduced company expansion plans contribute to weaker growth, demand, and lower inflation.
Remolona also suggested that corruption in infrastructure spending could be a reason why the Philippines has not been meeting its economic growth forecasts.
He believes governance issues related to infrastructure spending have led to underperformance in economic growth.
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