{"id":12558,"date":"2025-05-29T20:58:34","date_gmt":"2025-05-29T18:58:34","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=12558"},"modified":"2025-05-29T20:58:34","modified_gmt":"2025-05-29T18:58:34","slug":"bsps-strategies-to-bolster-economic-growth","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/05\/29\/bsps-strategies-to-bolster-economic-growth\/","title":{"rendered":"BSP&#8217;s Strategies to Bolster Economic Growth"},"content":{"rendered":"\n<p class=\"p2\"><span class=\"s2\">THE BANGKO SENTRAL ng <\/span>Pilipinas (BSP) is anticipated to reduce benchmark interest rates further this year to bolster the economy amid a tenuous global landscape as inflation continues to decline.<\/p>\n<p class=\"p3\"><span class=\"s3\">ING Bank predicts that the BSP will lower borrowing costs by 75 basis points <\/span><span class=\"s4\">(bps) more, according to its report.<\/span><\/p>\n<p class=\"p3\">\u201cA less-than-anticipated inflation path, a stronger-than-predicted local currency, and elevated real rates \u2014 alongside uncertainties in global growth \u2014 all imply a more significant rate cut cycle,\u201d remarked ING Bank\u2019s economic team.<\/p>\n<p class=\"p3\">\u201cWe now foresee that the policy rate will hit 4.75% by year-end, which should temper peso appreciation.\u201d<\/p>\n<p class=\"p3\"><span class=\"s5\">In contrast, Bank of America (BofA) Global Research noted in a different report that it expects the central bank to implement two additional cuts in the upcoming months.<\/span><\/p>\n<p class=\"p3\"><span class=\"s6\">\u201cWe believe the BSP will reduce its policy rate by at least 50 bps more for the remainder of 2025, with the next cut <\/span><span class=\"s7\">likely occurring on its June 19 meeting,\u201d it indicated.<\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">\u201cThe Bangko Sentral ng Pilipinas has reverted to an easing stance, as policy and growth outlook have become clearer. Economic growth (GDP) in the Philippines continues to remain sluggish, and with decreasing oil and rice prices, inflation is expected to remain low for an extended duration, giving the BSP the flexibility to ease further,\u201d BofA Global Research concluded. \u201cWith the current policy rate at 5.5%, the monetary policy posture <\/span><span class=\"s3\">now appears constrictive.\u201d<\/span><\/p>\n<p class=\"p3\">It anticipates the Philippine economy to grow by 5.5% this year and 5.6% in 2026, both falling short of the government\u2019s 6-8% growth target for those years.<\/p>\n<p class=\"p3\">The Philippine GDP increased by 5.4% in Q1, slightly surpassing the 5.3% rise from the previous three-month period but slower than the 5.9% rate in the same quarter last year.<\/p>\n<p class=\"p3\">Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon stated that GDP must expand by at least 6.2% in the remaining three quarters to achieve a 6% growth \u2014 the lower end of the government\u2019s 6-8% growth objective \u2014 by yearend.<\/p>\n<p class=\"p3\"><span class=\"s7\">BofA Global Research noted that most central banks in the Association of Southeast Asian Nations (ASEAN) region have implemented rate cuts this quarter, resuming their easing patterns following the \u201cincreased uncertainty\u201d earlier in the year.<\/span><\/p>\n<p class=\"p3\"><span class=\"s3\">\u201cWe anticipate this trend to persist, as relative stability in financial markets paired with a slight easing of trade risks offers a window for ASEAN central banks to reduce rates further.\u201d<\/span><\/p>\n<p class=\"p3\"><span class=\"s3\">Last month, the Monetary Board reduced benchmark interest rates by 25 bps to 5.5%, realigning its rate-cut cycle after an unanticipated pause in February as officials considered the potential impact of widespread uncertainty resulting from the Trump administration\u2019s fluctuating trade policies on the Philippine economy.<\/span><\/p>\n<p class=\"p3\">The BSP has now decreased borrowing costs by 100 bps since initiating its easing cycle in August of the previous year.<\/p>\n<p class=\"p3\"><span class=\"s3\">Last week, BSP Governor Eli M. Remolona, Jr. mentioned that the Monetary Board might enact two additional 25-bp reductions this year, with the next decrease possible as soon as next month\u2019s meeting.<\/span><\/p>\n<p class=\"p3\">The BSP chief noted that diminishing inflation provides them \u201cample space\u201d to further relax their policy stance, although they are cautious not to cut \u201cexcessively\u201d as it could reignite price increases.<\/p>\n<p class=\"p3\">Following the June 19 review, the remaining meetings of the Monetary Board are scheduled for August, October, and December.<\/p>\n<p class=\"p3\">Meanwhile, ING mentioned that the peso might weaken once more in the coming months after its recent rise, as market risks due to global trade developments could impact the economy.<\/p>\n<p class=\"p3\">\u201cWhile the Philippines is primarily a domestic demand-driven economy, tariffs and the global trade downturn are likely to negatively affect export growth and BPO (business process outsourcing) activities in 2025,\u201d it stated.<\/p>\n<p class=\"p3\">\u201cBalance of payments (BoP) weaknesses persisted into the first quarter of 2025. Hence, we expect the PHP to demonstrate a mild depreciation tendency,\u201d it added. \u201cHowever, this perspective could be influenced by further dollar weakening and remarks from the BSP indicating limited intervention to moderate peso strength in such circumstances.\u201d<\/p>\n<p class=\"p3\">The central bank previously mentioned it generally refrains from intervening in the foreign exchange market and only does so in \u201cminor amounts\u201d as necessary to prevent speculation and maintain market order.<\/p>\n<p class=\"p3\">The peso has been trading around the P55 threshold this month due to widespread dollar weakness after fluctuating between the P57-P58 range for a significant part of the first quarter, impacted by Mr. Trump\u2019s policy announcements following his return to the White House in January, which unsettled global financial markets.<\/p>\n<p class=\"p3\"><span class=\"s7\">The local currency last week approached near two-year highs as the dollar faced pressure after Moody\u2019s Ratings downgraded the United States\u2019 triple-A credit rating, though it has since weakened.<\/span><\/p>\n<p class=\"p3\">On Thursday, the peso closed at P55.73 against the US dollar, down by 25.5 centavos from Wednesday\u2019s finish, after a US court ruling blocked most of Mr. Trump\u2019s \u201cLiberation Day\u201d reciprocal tariffs announced in April, which boosted the dollar.<\/p>\n<p class=\"p3\">Year-to-date, the peso is still up by P2.115 or 3.8% compared to its end-2024 close of P57.845. \u2014 <b>Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bworldonline.com\/top-stories\/2025\/05\/30\/675897\/bsp-to-ease-further-to-support-economy\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>THE BANGKO SENTRAL ng Pilipinas (BSP) is anticipated to reduce benchmark interest rates further this year to bolster the economy amid a tenuous global landscape as inflation continues to decline. ING Bank predicts that the BSP will lower borrowing costs by 75 basis points (bps) more, according to its report. \u201cA less-than-anticipated inflation path, a<\/p>\n","protected":false},"author":3,"featured_media":12559,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[2576],"class_list":["post-12558","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-bsp-to-ease-further-to-support-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>BSP&#039;s Strategies to Bolster Economic Growth - 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\/05\/29\/bsps-strategies-to-bolster-economic-growth\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP&#039;s Strategies to Bolster Economic Growth - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"THE BANGKO SENTRAL ng Pilipinas (BSP) is anticipated to reduce benchmark interest rates further this year to bolster the economy amid a tenuous global landscape as inflation continues to decline. 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