The facade of the Bangko Sentral ng Pilipinas on February 15, 2024. Jonathan Cellona, ABS-CBN News

Arthur Fuentes

Benise Balaoing

ABS-CBN News

MANILA (UPDATE) -- The Bangko Sentral ng Pilipinas (BSP) has finally cut interest rates.The Monetary Board of the BSP decided to cut its target reverse repurchase rate by 25 basis points to 6.25 percent on Thursday, said BSP Governor Eli Remolona.&quot;The interest rates on the overnight deposit and lending facilities were accordingly adjusted to 5.75 percent and 6.75 percent, respectively,&quot; Remolona added.The BSP chief already hinted at an August rate cut, saying the balance of risks to the inflation has shifted to the downside for 2024 and 2025. Remolona also signaled that the central bank was ready to cut rates by another 25 basis points this year &quot;perhaps in October or December.&quot;This would bring the total reductions to 50 basis points. Remolona said the BSP expects the rate cut to help household consumption, which had been lackluster according to the latest GDP figures. &quot;Consumption was relatively weak. So it doesn&#x27;t look like something that could easily be sustained, and so that we went for a cut, partly because of that,&quot; Remolona said.While inflation quickened to 4.4 percent in July as power and fuel costs increased, the BSP said they decided to cut rates as headline inflation is projected to trend downward to within the government&#x27;s 2 to 4 percent target range, despite the uptick last month. <div><iframe width="640" height="360" src="https://www.youtube.com/embed/InFIoNudELg?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>&quot;The risk-adjusted inflation forecasts for 2024 and 2025 now stand at 3.3 percent and 2.9 percent, respectively. Meanwhile, the risk-adjusted forecast for 2026 is 3.3 percent,&quot; Remolona said during Thursday&#x27;s briefing. Inflation may ease this year with the reduction of import tariffs on rice, but external factors and higher electricity rates may also push the figure up. BSP Deputy Governor Francisco Dakila said the BSP is looking at the impact of the Supreme Court nullification of the Energy Regulatory Commission&#x27;s 2014 decision to cap Whole Electricity Spot Market prices. &quot;And on external factors, of course, there&#x27;s always the uncertainty coming from geopolitical risks, mostly from the Middle East and also from Ukraine, which could impact global oil and food prices,&quot; Dakila said. Remolona added that apart from the reduction in interest rates, the BSP will also consider reducing the reserve requirement ratio (RRR) for banks. &quot;I think we should reduce the reserve requirement quite substantially. Right now, it&#x27;s at a ridiculous level. It&#x27;s 9.5 percent. It needs to go down substantially, but we haven&#x27;t made any decision when to do it. We will do it,&quot; the BSP chief said.  The BSP has been keeping monetary policy tight in a bid to curb inflation. In October 2023, it made an off-cycle 25 basis-point rate hike--bringing rates to a 17-year high--after inflation quickened to 6.1 percent in September.Alfred Garcia, Research head, AP Securities said they also expect one more rate cut of 25 bps this year. &quot;That’s our base case scenario for 2024: we expect 1 rate cut of 25 bps again, maybe either in October or December. But we expect that the BSP will kind of take it easy for a while, see how it plays out first,&quot; Garcia said in an interview with ANC.

Bangko Sentral cuts interest rates by 25 bps, another rate cut this year likely | ABS-CBN

Entertainment

News

Metro.Style

Sports

More

Business

Bangko Sentral cuts interest rates by 25 bps, another rate cut this year likely

Bangko Sentral cuts interest rates by 25 bps, another rate cut this year likely

Arthur Fuentes,

Benise Balaoing,

ABS-CBN News

Published Aug 15, 2024 03:04 PM PHT

|

Updated Aug 15, 2024 04:29 PM PHT

Read More:

ABSnews

ANC promo

BSP

benchmark rate

reverse repurchase rate

interest reates

Eli Remolona

ABS-CBN is the leading media and entertainment company in the Philippines, offering quality content across TV, radio, digital, and film. Committed to public service and promoting Filipino values, ABS-CBN continues to inspire and connect audiences worldwide.

Corporate

Investors

Governance

International Distribution

Corporate

Governance

Investors

International Distribution

NPC Seal of Registration

Privacy Policy

Terms of Service

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Advertise with Us

Privacy Policy

Terms of Service

© 2025 ABS-CBN Corporation. All Rights Reserved.