(Bloomberg) -- Philippine central bank Governor Eli Remolona said two more rate cuts are possible this year, signaling a more aggressive easing cycle after the US Federal Reserve’s outsized reduction.
The Bangko Sentral ng Pilipinas could cut its key rate by 25 basis points both at its October and December meetings, Remolona told reporters on Wednesday, giving his first rate outlook since the Fed kicked off an easing cycle with a half-point cut last week.
Remolona’s latest guidance for a cumulative 50-basis-point reduction for the rest of the year is larger than his earlier signal for a quarter-point reduction for the remainder of 2024. Finance Secretary Ralph Recto, who sits in the rate-setting panel, last week said in the wake of the Fed cut that he will recommend a 50-basis-point easing next month.
The Bangko Sentral ng Pilipinas, which pivoted to looser settings in August with a quarter—point rate cut, last week announced a 250-basis-point reduction in banks’ reserve requirement starting Oct. 25. The BSP is pulling another lever to help spur one of Asia’s fastest-growing economies that has faced constraints with borrowing costs at a 17-year high.
Remolona expects price pressures to ease further this month. Inflation that moderated back to the BSP’s 2%-to-4% goal in August gives policymakers room to sustain the easing cycle.
The central bank chief previously said that economic growth may fall below the 6.5% to 7.5% government target for 2025, providing more reason to continue rate cuts.
--With assistance from Cecilia Yap.
©2024 Bloomberg L.P.
