Next Philippine Rate Cut Could Come This Month, Governor Says

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(Bloomberg) — Philippine central bank Governor Benjamin Diokno said another policy rate cut of at least 25 basis points could come as early as this month.

A cut in banks’ reserve requirement ratio may also come this month or in October, with a reduction possible at the Sept. 26 rate meeting, Diokno told reporters in Tarlac province north of the Philippine capital on Friday.

“The prospects are bright that might come sooner than later,” Diokno said of a potential easing. “ won’t reach November or December, could be sooner.”

Diokno, who has cut the policy rate by a total 50 basis points this year, has earlier promised to trim the rate by at least another quarter-of-a-percentage point before yearend. The raised the key rate by 175 basis points in 2018.

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Highlights:

  • The inflation picture “is getting brighter and brighter,” Diokno said as consumer price gains fall within the central bank’s target range. Inflation may fall below 2% again in September and October because of base effects, he said
  • Latest data showed the Philippine economy grew 5.5% in the second quarter, the slowest since 2015; inflation was at 1.7% in August, its lowest point since 2016
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Source: Investing.com