BSP cuts interest rates by 25bps to 5.5%, forecasts further easing

The Bangko Sentral ng Pilipinas (BSP) has resumed its easing monetary policy, cutting interest rates by 25 basis points to 5.5 percent in response to a benign inflation outlook and potential risks to economic growth.

Fitch Solutions unit BMI forecasted that the BSP will cut policy rates again in June with another 25-basis-point reduction, bringing the rate to 5 percent for the year.

BMI cited the slowing down of inflation rate, which stood at 1.8 percent in March, and projected inflation to average 2.6 percent this year as factors contributing to possible further rate cuts by the central bank.

The Monetary Board of the BSP is scheduled to have four more meetings this year -- June 19, August 28, October 9, and December 11 - to discuss whether or not a change in key policy settings is warranted.

BMI added that concerns over US President Donald Trump's tariffs may force the central bank to cut rates more aggressively if the higher tariff rate of 17 percent is implemented.