The Bangko Sentral ng Pilipinas (BSP) is likely to cut its benchmark rate by 25 basis points on August 28, the second of three scheduled policy meetings for the rest of the year, Governor Eli Remolona Jr. said on Monday.
“It is quite likely,” Remolona replied to a reporter’s query on the sidelines of a forum hosted by the Economic Journalists Association of the Philippines (EJAP), adding that the move toward “two [cuts] is more likely than one.”
The BSP last lowered rates in July, its fifth since August 2024, alongside a reduction in banks’ reserve requirements.
He said the central bank aims to bring the reverse repurchase rate below 5 percent by end-2025, supported by inflation that is expected to average 2 percent this year and next—lower than the projected 3.1 percent for emerging markets and 3.3 percent for advanced economies.
“We think we’ll hit 2 percent in 2025. That’s much better than other emerging markets. They would hit 3.1 percent, and other advanced economies, we think, will hit 3.3 percent. So, lower inflation than both advanced economies and emerging markets. That’s the broad picture,” the BSP governor said in his speech at the forum.
Core inflation, which strips out food and energy, was 2.3 percent in July. While it is projected to climb to about 3 percent by 2027, Remolona said it “still looks good” and remains within the BSP’s 2-4 percent target.
Peso ‘not a concern’
Remolona said the peso’s recent weakness was not a concern, with the currency closing at P57.04 to the US dollar on Monday, from P57.11 at the close of last week’s trade Friday.
The BSP has been intervening “in small amounts” on a “day-to-day” basis to curb volatility, he said, noting that sharp swings—not specific levels—pose the bigger risk by feeding inflation through the pass-through effect.
The peso, which briefly breached P58 to a dollar last month, remains within a level the BSP is “comfortable” with.
The central bank maintains a free-floating exchange rate but steps in to prevent disorderly market conditions.
The BSP’s remaining policy meetings for the year are scheduled for October 9 and December 11.
