Philippines c. bank cuts interest rate by 25 bps

The Philippine central bank, Bangko Sentral ng Pilipinas (BSP) decided on Wednesday to reduce its target reverse repurchase (RRP) rate by 25 basis points to 6.00 per cent. The interest rates on the overnight deposit and lending facilities were also cut to 5.50 per cent and 6.50 per cent, respectively.

The decision is effective as of Thursday, 17 October 2024.

The risk-adjusted inflation forecast for 2024 was revised downward to 3.1 per cent from 3.3 percent in the previous meeting. However, the forecasts for 2025 and 2026 were slightly raised to 3.3 per cent and 3.7 per cent, respectively.

The balance of risks to the inflation outlook for the next two years has shifted towards the upside, primarily due to potential increases in electricity rates and higher minimum wages outside of Metro Manila. On the other hand, downside risks remain linked to the impact of lower import tariffs on rice.

Attribution: Bangko Sentral ng Pilipinas report

Subediting: Y.Yasser