The Bangko Sentral ng Pilipinas (BSP) is expected to reduce its key overnight rate by 25 basis points (bps) this week, bringing the policy rate to 5 percent, analysts said over the weekend.
The analysts also see a cumulative 50 bps cut for the rest of the year, with the policy rate falling to 4.75 percent. The recent speech by US Federal Reserve Chairman Jerome Powell has bolstered these expectations.
April Tan, head of research at Colfinancial.com, said Powell’s pronouncement at Jackson Hole “removed the reservations” about a second rate cut by the BSP later in the year.
“Prior to that, there were apprehensions about whether or not the Fed would cut rates. [For] the Monetary Board, on the other hand, it is a question of one or two cuts. It seems like it is largely dependent on what the Fed will do. So now that the Fed is more dovish, it’s most likely two cuts for the year,” Tan explained.
The BSP’s Monetary Board is scheduled to meet on Thursday, August 28.
