The Philippine central bank Governor Benjamin Diokno said he sees about 50 basis points of interest rate cuts for the rest of the year, with the timing of the reductions likely to depend on incoming economic data.
“Until the end of the year, it’s around 50 basis points,” Diokno said on Monday when asked if he was open to lowering borrowing costs further. “If we’ll do a 50 basis points, we’ll make it clear that this is the end of the easing period for this year to give banks time to adjust.”
“We’ll be guided by the widest available economic and market data,” Diokno told Bloomberg in Manila. Policymakers are monitoring inflation numbers due on Tuesday and economic growth data on Thursday, as well as signs of further escalations in US-China trade tensions, he said.
Bangko Sentral ng Pilipinas left its benchmark interest rate unchanged in June after cutting it by 25 basis points in the previous month as it takes a prudent approach to easing monetary policy. Most of the economists surveyed by Bloomberg predict the central bank will cut rates by another 25 basis points to 4.25 per cent on Thursday after the US Federal Reserve lowered borrowing costs last week.
Diokno said inflation will average 2.6 per cent this year and 2.9 per cent in 2020, down from the central bank’s previous projections of 2.7 per cent and 3 per cent respectively.