By: Neil Jerome Morales and Mikhail Flores
Location: MANILA (Reuters) – The Philippine central bank lowered its key interest rate by 25 basis points again, now at 6%. This is the lowest rate since February 2023, as inflation is expected to stay within the target of 2%-4%.
Governor Eli Remolona said the decision was made because price pressures are manageable. All 23 economists surveyed predicted this cut.
In the region, Thailand also cut its key interest rate unexpectedly, while the Bank of Indonesia kept its rate the same.
The Philippine peso stayed stable at 57.73 to the dollar following the rate cut. The central bank revised its inflation forecast for 2024 from 3.4% to 3.1% but increased projections for 2025 and 2026 due to possible changes in electricity rates and wages.
Remolona indicated that another quarter-point cut could happen in December, with a total of 100 basis points expected next year.
Remolona added that the bank will continue to adjust rates gradually, ideally in 25 basis point steps, but not necessarily in every meeting.
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