Economists see room for further interest rate cuts

Private-sector economists, including HSBC ASEAN economist Aris Dacanay and Citi Economist Nalin Chutchotitham, believe that the Bangko Sentral ng Pilipinas (BSP) has more room to cut interest rates following February's low inflation rate of 2.1%, down from January's 2.9%.

The central bank stated on Wednesday that lower inflation supports its assessment and potential further easing in the second quarter, with Citi forecasting full-year inflation at 2.6% this year.

Economists note that slower inflation creates room for monetary policy rate cuts this year, which could help boost household consumption and economic growth, especially as rice prices continue to decline.

However, risks such as global uncertainties and the country's current account deficit warrant close monitoring, with the BSP signaling up to 50 bps worth of rate reductions by end-2025, bringing the benchmark to 5%.