Philippines cuts key rate for second time as price gains slow

THE Philippine central bank cut its benchmark interest rate by 25 basis points for the second time this year, as slowing inflation gave it room for further easing.

The Bangko Sentral ng Pilipinas reduced the target rate to 6 per cent on Wednesday (Oct16), as expected by 25 of 26 economists in a Bloomberg survey. 

The central bank kicked off its easing cycle in August, and governor Eli Remolona has signalled a preference for quarter-point cuts, instead of bigger reductions, unless the South-east Asian nation’s economic growth “turns out to be worse than we thought.”

Philippine inflation slowed to a four-year low of 1.9 per cent in September, putting the nine-month average at 3.4 per cent, which is within the central bank’s forecast range. The economy grew 6.3 per cent in April-June from a year ago, among the fastest in Asia. BLOOMBERG