MACTAN: Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. stated that another policy rate cut might be considered next month or during the Monetary Board’s subsequent meeting in 2025. “We’re still in the easing cycle. Either we cut in December or we cut in the next meeting, pero dahan dahan lang (but gradually),” Remolona mentioned on the sidelines of the 2024 BSP-International Monetary Fund (IMF) Systemic Risk Dialogue held in Mactan, Cebu.

According to Philippines News Agency, Remolona did not dismiss the possibility of a pause in the easing cycle. The Monetary Board of the BSP has so far reduced key interest rates by a total of 50 basis points this year. This brings the target reverse repurchase rate to 6 percent and the overnight deposit and lending facilities rate to 5.50 percent and 6.50 percent, respectively. Remolona indicated that if the Monetary Board opts for a rate cut, it will be by another 25 basis points.

He further stated that the BSP is awaiting the November headline inflation dat
a, which will be released in early December. “The next number to expect is the November inflation number… let’s see what that is. Our expectation is it is still within the target band for November,” he said. Headline inflation stood at 2.3 percent in October this year.

Remolona also mentioned that the BSP anticipates a rebound in Philippine economic growth in the fourth quarter. The country’s economic growth decelerated to 5.2 percent in the third quarter from a 6 percent expansion in the same period last year. “Just an aberration. I think it will rebound in the fourth quarter,” he remarked.

Additionally, Remolona noted that the BSP is observing the movement of the peso against the US dollar. “We don’t worry so much about whether the peso depreciates, appreciates, we worry about the passthrough effect. Maybe for now, it’s still okay,” he commented. The peso has been trading around the 58 to a US dollar level this month. “We leave it to the guys in the financial markets area, but if it depreciates very sharp
ly, then we talk. If it’s not sharp, it doesn’t become inflationary. It’s inflationary if it’s sharp and continuous, we don’t intervene in the day-to-day movements,” Remolona added.