Philippine central bank cuts policy rate by 25 bps

[MANILA] The Philippine central bank resumed its easing cycle on Thursday (Apr 10), as expected, cutting its key policy rate by 25 basis points to 5.50 per cent to help the economy cope with global challenges, including the potential fallout from US trade policy.

The quarter-point reduction in the benchmark interest rate , which was forecast by 20 out of 23 economists in a Reuters poll, came after data last week showed inflation eased to a near five-year low of 1.8 per cent in March.

Bangko Sentral ng Pilipinas governor Eli Remolona said a “more challenging external environment” was a risk for global and domestic growth.

“On balance, the more manageable inflation outlook and the risks to growth allow for a shift toward a more accommodative monetary policy stance,” he told a press conference.

“Looking ahead, the BSP will continue to take a measured approach in deciding on further monetary easing.”

Though less affected than some of its neighbours, the Philippines has not been spared from the global trade wars, with the US threatening tariffs on its exports.

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Philippine annual inflation slows to near five-year low in March

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Manila is targeting growth of 6.0 per cent-8.0 per cent this year, up from last year’s 5.7 per cent expansion.

The BSP cut rates at three consecutive meetings from August last year, but then surprised markets by pausing at its February review. REUTERS