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BSP rate cuts in June and August likely on the table, says Deutsche Bank
Deutsche Bank predicts the Bangko Sentral ng Pilipinas (BSP) will implement two 25-basis point policy rate cuts on June 19 and August 28, bringing the total cuts to 100 bps for the year.
This projection is based on inflation remaining below the BSP's 2-4% target range, with Deutsche Bank forecasting an average of 1.9% for 2025.
The BSP's own forecast anticipates an average inflation rate of 2.3% for the year, with April's inflation at 1.4%.
Slower-than-expected economic growth of 5.4% in the first quarter also supports the case for further monetary easing.
Deutsche Bank emphasizes the need to maintain a positive interest rate differential between the BSP's policy rate and the US Federal Funds Rate to avoid pressuring the Philippine peso.
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News Sources
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The Bangko Sentral ng Pilipinas (BSP) projects that the inflation rate for May 2025 will be lower, with an estimated range of 0.9 percent to 1.7 percent.
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Philippine inflation slowed to 1.3% in May, the lowest in nearly six years and within the Bangko Sentral ng Pilipinas' forecast range of 0.9% to 1.7%.
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Chinabank anticipates the Bangko Sentral ng Pilipinas (BSP) will maintain a cautious stance on policy rate adjustments, despite a recent slowdown in inflation.
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