Philippine central bank Governor Eli M. Remolona Jr. said monetary authorities may cut the benchmark interest rate one more time in the current easing cycle with the economic recovery likely to last longer than thought.
鈥淚f we get off the fence it鈥檚 probably another rate cut but that鈥檚 probably about it. One more rate cut,鈥 Mr. Remolona said in an interview with Bloomberg Television鈥檚 Stephen Engle and Annabelle Droulers on Friday.
Mr. Remolona said the economy 鈥渓ooks worse than we thought鈥 in the current quarter, prompting the Bangko Sentral ng Pilipinas to cut its key rate for a fifth straight meeting on Thursday. 鈥淭he latest data seems to suggest recovery will be delayed by a quarter or two. We don鈥檛 see a significant recovery until second half of 2026,鈥 he said.
The central bank cut its overnight target reverse repurchase rate by 25 basis points to 4.5%, the lowest since September 2022.
Mr. Remolona said on Thursday that it may be the last reduction in its easing cycle that began over a year ago, with domestic demand set to recover.
The central bank has said it expects a gradual recovery in domestic demand following previous rate cuts. A graft scandal involving billions of dollars meant for flood control projects had curbed consumer and state spending, causing gross domestic product growth to slow sharply in the last quarter. — Bloomberg
