Bangko Sentral ng Pilipinas’ (BSP) officials are eyeing at least 25 basis points cut this week as additional measure to help contain the economic impact of the coronavirus disease 2019 (Covid-19), similar to what is being done overseas.
“The MB (Monetary Board) might consider a higher cut given the synchronized global monetary easing, sharp fall in oil prices, (and) worsening Covid-19 breakout,” BSP Governor Benjamin Diokno said in reply to journalists’ query through mobile phone messaging.
BSP’s policy-making monetary board will have its second rate-setting meet on Thursday, and is widely expected to deliver at least 25 basis points.
If ever the Board reduces the central bank’s key rates this week, it will be the second for the year after the 25-basis-point slash last February.
Diokno earlier committed a 50-basis-point reduction in the BSP rates this year in a bid to reverse the total of 175 basis points increase in key rates in 2018, which was made to address that year’s elevated inflation rate.
In recent days, central banks around the globe announced more aggressive measures due to, among others, the bid to address the economic impact of Covid-19, which the World Health Organization (WHO) has declared as a global pandemic because of the volume of cases which has surpassed 150,000.
For one, the Federal Reserve on Sunday announced another emergency rate cut of 100 basis points, after the 50-basis-point cut last March 3, to support the world’s largest economy to the impact of the global pandemic.
The Bank of Japan (BOJ) on Monday also announced its decision to increase its asset purchases program to help stabilize financial markets.
It will double its annual exchange traded fund (ETF) purchases from 6 trillion yen to 12 trillion yen, and vowed to increase its target of commercial paper and corporate bond purchases by 2 trillion yen by end-September.
Source: Philippines News Agency