The Philippine central bank Governor Benjamin Diokno said that he expects the interest rates to be cut by 50 basis points for the year. According to him, a 50 basis points cut will mark the end of the easing period for this year and give banks time to adjust.
“We’ll be guided by the widest available economic and market data,” Benjamin Diokno told the media.He added that the country’s 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.Bangko Sentral ng Pilipinas, the country’s central bank did not bring any changes to interest rates in June.
However, the interest rate was cut by 25 basis points in the previous month. After the Fed lowered its interest rates, experts believe Philippine’s central bank will cut rates by another 25 basis points to 4.25 percent.
The Philippine’s central bank previously predicted inflation to be at 2.7 percent in 2019 and 3 percent in 2020. However, the governor recently said that inflation will average at 2.6 percent this year and 2.9 percent in 2020.
Earlier in May, the central bank announced that it would cut the reserve requirement ratio (RRR) for small and medium-sized banks from 8to 6 percent.
The Phillippines rate cuts which was to be implemented in three parts saw a 100 basis point reduction in the month of May. The other two deductions were of 50 basis points each. Similarly, the reserve requirement ratio for co-operative banks was cut by 100 basis points.