(Manila, 29th) The Philippine central bank has once again lowered its key policy rate by 25 basis points to 5%, marking the third rate cut this year and the lowest level in nearly three years.
On Thursday (August 28), the Philippine central bank announced a 25 basis point cut to its overnight reverse repurchase rate, bringing it down to 5%. This is the lowest since November 2022 and is in line with the consensus forecast of 26 economists surveyed by Bloomberg. The overnight deposit and lending rates were also reduced to 4.50% and 5.50% respectively.
In April and June this year, the Philippine central bank had previously cut rates by 25 basis points each. Since last year, the cumulative rate cut has reached 150 basis points.
Central bank governor Remolona stated that the current inflation outlook remains generally stable, which is the main reason for continuing to cut rates. According to the latest forecasts, the annual inflation rate for this year is expected to be 1.7%, slightly up from the previous 1.6%.
However, he cautioned that potential risks still need to be monitored, especially the uncertainty surrounding U.S. trade and investment policy, which may inhibit the economic outlook for the Philippines.
After the news was released, the peso strengthened slightly against the U.S. dollar, with the dollar falling 0.2% against the peso to 57.030.