BSP may cut rates anew before yearend

Finance Secretary Ralph Recto indicated that the Bangko Sentral ng Pilipinas (BSP) may implement at least one more policy interest rate cut before the year ends.

This decision will be influenced by the US Federal Reserve's monetary policy and the Philippines' inflation trends.

The BSP already made its third rate cut of the year in August, bringing the policy rate down to five percent.

Since it started its easing cycle in August 2024, the BSP has slashed policy rates by 150 basis points.

BSP Deputy Governor Zeno R. Abenoja stated that inflation is expected to average below the target at around 1.7% this year, with projections for 2026 and 2027 to be around 3.3% to 3.4%, suggesting a move towards a 'sweet spot' for interest rates.

This suggests the BSP has more room to continue its policy easing to support economic growth, especially after the US Federal Reserve delivered a cut, but will remain cautious amid lingering inflation risks.