{"id":10021,"date":"2025-03-21T02:26:33","date_gmt":"2025-03-21T01:26:33","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=10021"},"modified":"2025-03-21T02:26:33","modified_gmt":"2025-03-21T01:26:33","slug":"further-reductions-expected-if-economic-growth-slows-down","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/21\/further-reductions-expected-if-economic-growth-slows-down\/","title":{"rendered":"Further Reductions Expected if Economic Growth Slows Down"},"content":{"rendered":"\n<p class=\"p2\"><span class=\"s3\">THE BANGKO SENTRAL ng <\/span><span class=\"s4\">Pilipinas<\/span><span class=\"s5\"> (BSP) may reduce rates next month, according to its leading official, <\/span>indicating the potential for easing of up to 75 <span class=\"s6\">basis points (bps)<\/span> <span class=\"s5\">throughout the year if economic <\/span>performance deteriorates further.<\/p>\n<p class=\"p3\"><span class=\"s6\">\u201cWe have been on a loosening trajectory for some time now. We simply took a <\/span><span class=\"s5\">break,\u201d BSP Governor Eli M. Re<\/span><span class=\"s6\">molona, Jr. stated to Bloomberg during a televised discussion with Haslinda Amin on Wednesday. <\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">He mentioned that there is an increased probability that the Monetary Board will implement a rate reduction during its policy assessment on April 10, particularly if inflation <\/span><span class=\"s6\">performs better than anticipated. <\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">Inflation significantly decreased to 2.1% in February, leading to a two-month average of 2.5%. This falls comfortably within the central bank\u2019s 2-4% target.\u00a0<\/span><\/p>\n<p class=\"p3\">Data on March inflation will be published on April 4.<\/p>\n<p class=\"p3\"><span class=\"s7\">Mr. Remolona also indicated the possibility of up to 50 bps worth of rate deductions this year. Nonetheless, if economic output is less robust than expected, the central bank could implement up to 75 bps worth of easing. <\/span><\/p>\n<p class=\"p3\">The gross domestic product (GDP) of the Philippines expanded by 5.6% in 2024, falling short of the government&#8217;s adjusted 6-6.5% target for the year.<\/p>\n<p class=\"p3\">In its most recent monetary policy report, the BSP noted that it anticipates economic growth to align with the lower tier of the government\u2019s 6-8% goals from this year until 2026, citing heightened global commodity prices and trade uncertainties.<\/p>\n<p class=\"p3\">GDP figures for the first quarter will be announced on May 8.<\/p>\n<p class=\"p5\"><b>US RECESSION<br \/>\n<\/b>Simultaneously, the BSP leader mentioned that although he does not foresee a recession in the United States, a slowdown is \u201chighly probable.\u201d<\/p>\n<p class=\"p3\"><span class=\"s7\">US President Donald J. Trump has committed to enforcing widespread reciprocal tariffs and supplementary sector-specific tariffs commencing on April 2.\u00a0<\/span><\/p>\n<p class=\"p3\"><span class=\"s9\">Markets are preparing for the possible effects from inflationary challenges stemming from these tariffs, which could lead the US Federal <\/span><span class=\"s10\">Reserve to postpone its own easing cycle. <\/span><\/p>\n<p class=\"p3\">The US central bank decided to maintain interest rates on Wednesday, as anticipated. Fed Chair Jerome H. Powell stated that they are in no rush to make any adjustments amid economic uncertainties.<\/p>\n<p class=\"p3\"><span class=\"s7\">Mr. Remolona remarked that the tariff dispute would \u201cdefinitely\u201d have spillover effects on the Philippines.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">\u201cThe tariff conflict is expected to hinder growth for everyone and subsequently increase inflation for all. The extent of this impact is uncertain. However, the <\/span><span class=\"s6\">greater concern is the uncertainty itself,\u201d he articulated. <\/span><\/p>\n<p class=\"p3\">Nevertheless, this would result in a \u201cminimal\u201d impact on the Philippine economy.<\/p>\n<p class=\"p3\">\u201cWe will be somewhat affected as we are part of a global economy,\u201d Mr. Remolona noted.<\/p>\n<p class=\"p5\"><b>ROOM FOR EASING<br \/>\n<\/b>Meanwhile, the BSP has the capacity to implement further policy loosening amid low inflation, Nomura Global Markets Research indicated.<\/p>\n<p class=\"p3\"><span class=\"s7\">\u201cDownside risks to growth, subdued inflation, and elevated real rates imply that there is still potential to ease,\u201d Nomura Global Markets Research analysts Sonal Varma and Si Ying Toh outlined in a report. <\/span><\/p>\n<p class=\"p3\">Nomura anticipates the central bank to reduce rates by 75 bps this year.<\/p>\n<p class=\"p3\">\u201cDisinflation is taking place in Asia, with inflation falling within central bank expectations in most nations,\u201d the report noted.<\/p>\n<p class=\"p3\">Nomura also expressed expectations for low inflation to persist.<\/p>\n<p class=\"p3\">\u201cCore inflation has decreased by 1.2 percentage points compared to six months prior, and it holds the second-highest real policy rate in the region, indicating still-restrictive policy rates,\u201d Nomura stated.<\/p>\n<p class=\"p3\">\u201cWe predict an additional 75 bp in policy rate cuts, which would bring the policy rate to 5% by the end of 2025.\u201d<\/p>\n<p class=\"p3\">At the same time, ANZ Research mentioned that it expects the BSP to cut by 50 bps this year.<\/p>\n<p class=\"p3\"><span class=\"s7\">\u201cFor the remainder of 2025, we foresee another 50 bp of rate reductions in Indonesia, the Philippines, South Korea, and Thailand,\u201d it stated in its most recent quarterly research report.<\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">\u201cIn our view, monetary policy will be less effective. The monetary policy in the region has shown a bit more independence from the Fed than we previously anticipated,\u201d it added.<\/span><\/p>\n<p class=\"p3\">In addition, ANZ projected GDP to grow by 5.7% this year. This would not achieve the government\u2019s 6-8% target for 2025.<\/p>\n<p class=\"p3\">It noted that household savings in the Asian region have been underwhelming.<\/p>\n<p class=\"p3\"><span class=\"s10\">\u201cSavings deficiencies are pronounced in Indonesia and the Philippines, where surveys indicated a decrease in the proportion of income allocated for savings or a decline in the number of households with adequate savings.\u201d<\/span><\/p>\n<p class=\"p3\"><span class=\"s10\">\u201cHouseholds are also becoming more cautious regarding leverage. <span class=\"Apple-converted-space\">\u00a0 <\/span>The Philippines stands out as the sole exception where household borrowing continues to grow at a significant pace. However, given the weak survey outlook on family financial conditions, this lending trend is unlikely to persist long-term.\u201d \u2014 <b>Luisa Maria Jacinta C. Jocson <\/b><i>with<\/i><b> Bloomberg<\/b><\/span><\/p>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bworldonline.com\/top-stories\/2025\/03\/21\/660764\/more-cuts-likely-if-growth-weakens\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>THE BANGKO SENTRAL ng Pilipinas (BSP) may reduce rates next month, according to its leading official, indicating the potential for easing of up to 75 basis points (bps) throughout the year if economic performance deteriorates further. \u201cWe have been on a loosening trajectory for some time now. We simply took a break,\u201d BSP Governor Eli<\/p>\n","protected":false},"author":3,"featured_media":10022,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[1787],"class_list":["post-10021","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy-and-markets","tag-return-a-list-of-comma-separated-tags-from-this-title-more-cuts-likely-if-growth-weakens"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Further Reductions Expected if Economic Growth Slows Down - WSJ-Crypto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/21\/further-reductions-expected-if-economic-growth-slows-down\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Further Reductions Expected if Economic Growth Slows Down - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"THE BANGKO SENTRAL ng Pilipinas (BSP) may reduce rates next month, according to its leading official, indicating the potential for easing of up to 75 basis points (bps) throughout the year if economic performance deteriorates further. \u201cWe have been on a loosening trajectory for some time now. 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