{"id":13688,"date":"2025-07-03T23:50:39","date_gmt":"2025-07-03T21:50:39","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=13688"},"modified":"2025-07-03T23:50:39","modified_gmt":"2025-07-03T21:50:39","slug":"bsp-identifies-potential-for-two-additional-rate-reductions","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/07\/03\/bsp-identifies-potential-for-two-additional-rate-reductions\/","title":{"rendered":"BSP Identifies Potential for Two Additional Rate Reductions"},"content":{"rendered":"\n<p class=\"p2\"><span class=\"s2\">THE BANGKO SENTRAL ng <\/span><span class=\"s3\">Pilipinas<\/span><span class=\"s4\"> (BSP) on Thursday announced <\/span><span class=\"s5\">there is capacity for two additional rate reductions <\/span><span class=\"s6\">this<\/span> <span class=\"s6\">year<\/span> <span class=\"s6\">as<\/span> <span class=\"s6\">price growth<\/span> <span class=\"s6\">stays<\/span> <span class=\"s6\">manageable.<\/span><\/p>\n<p class=\"p3\"><span class=\"s4\">\u201cThere\u2019s capacity [to lower] because inflation is subdued, and growth is slightly lower too. However, the reductions can\u2019t completely offset the deceleration in growth,\u201d BSP Governor <\/span><span class=\"s3\">Eli M. Remolona, Jr. informed reporters.<\/span><\/p>\n<p class=\"p3\"><span class=\"s4\">Last month, the BSP reduced the target reverse repurchase rate by 25 basis points (bps) to 5.25% from 5.5% amid a softening inflation outlook and weaker-than-expected economic growth in the first quarter.<\/span><\/p>\n<p class=\"p3\">Inflation eased to a more than five-year low of 1.3% in May, bringing the five-month average to 1.9%, marginally below the BSP\u2019s 2-4% target range.<\/p>\n<p class=\"p3\"><span class=\"s3\">A <i>BusinessWorld<\/i> survey of 17 analysts produced a median estimate of 1.5% for June inflation, which is set to be released on Friday (July 4).<\/span><\/p>\n<p class=\"p3\">In response to whether slowing inflation provides the BSP the ability to reduce rates, Mr. Remolona answered: \u201cAbsolutely.\u201d<\/p>\n<p class=\"p3\">Upon being asked if this suggests two rate cuts this year, he replied: \u201cIt\u2019s conceivable. We still have meetings in August, October, and December.\u201d<\/p>\n<p class=\"p3\">\u201cThe decline in (first-quarter) growth was attributed to uncertainty. Major consumption items and investments were deferred, and exports faced a slowdown,\u201d Mr. Remolona mentioned in a mix of English and Filipino.<\/p>\n<p class=\"p3\">The Monetary Board\u2019s remaining policy meetings for this year are planned for Aug. 28, Oct. 9, and Dec. 11.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/p>\n<p class=\"p3\"><span class=\"s5\">Mr. Remolona indicated that the central bank will remain reliant on data before determining if additional rate cuts are necessary to bolster economic growth.<\/span><\/p>\n<p class=\"p3\">The Development Budget Coordination Committee (DBCC) revised the gross domestic product (GDP) growth target to 5.5-6.5% for this year, down from 6-8% previously, owing to increased global uncertainties arising from shifts in US trade policy and conflicts in the Middle East.<\/p>\n<p class=\"p3\"><span class=\"s5\">Additionally, the DBCC refined the GDP growth target range to 6-7% for 2026 to 2028, revised from 6-8% earlier.<\/span><\/p>\n<p class=\"p3\">Mr. Remolona expressed that the updated DBCC growth targets appeared more \u201crealistic.\u201d<\/p>\n<p class=\"p3\">Nonetheless, he confirmed that the BSP would maintain its 2-4% inflation target for the time being.<\/p>\n<p class=\"p3\"><span class=\"s7\">The DBCC adjusted its inflation forecast for 2025 to 2-3% from 2-4% previously but kept the 2-4% outlook for 2026 to 2028.<\/span><\/p>\n<p class=\"p3\">Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion expressed in a Viber message that he still anticipates just one more rate reduction this year.<\/p>\n<p class=\"p3\"><span class=\"s4\">\u201cNonetheless, the possibility for a second is now open if circumstances justify it. The revised DBCC targets, the improved inflation expectations, and the global and domestic challenges (sluggish global growth, geopolitical tensions, and domestic risks such as oil prices and rice tariffs are closely observed by the BSP) are among the factors that might support a more accommodative approach to foster growth,\u201d Mr. Asuncion stated.<\/span><\/p>\n<p class=\"p3\"><span class=\"s7\">Reyes Tacandong &amp; Co. Senior Adviser Jonathan L. Ravelas mentioned in a Viber message that the BSP could undertake two additional rate reductions this year, provided inflation remains in the low 2% spectrum.<\/span><\/p>\n<p class=\"p5\"><b>WAGE INCREASE<br \/>\n<\/b><span class=\"s7\">Meanwhile, Mr. Remolona remarked that the P50 daily wage hike for minimum wage earners in Metro Manila could influence inflation.<\/span><\/p>\n<p class=\"p3\">\u201cThere might be a slight effect, but we will still evaluate it,\u201d he stated.<\/p>\n<p class=\"p3\"><span class=\"s7\">Effective July 18, approximately 1.2 million workers in the National Capital Region and surrounding cities and provinces will receive a P50 daily wage boost \u2014 the largest pay increase ever granted by the National Wages and Productivity Commission.<\/span><\/p>\n<p class=\"p3\">This daily wage increase translates to a P1,100 monthly rise for a five-day work week or a P1,300 increase for those working six days per week, as stated by the Department of Labor and Employment. \u2014 <b>Aaron Michael C. Sy<\/b><\/p>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bworldonline.com\/top-stories\/2025\/07\/04\/683183\/bsp-sees-room-for-2-more-rate-cuts\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>THE BANGKO SENTRAL ng Pilipinas (BSP) on Thursday announced there is capacity for two additional rate reductions this year as price growth stays manageable. \u201cThere\u2019s capacity [to lower] because inflation is subdued, and growth is slightly lower too. However, the reductions can\u2019t completely offset the deceleration in growth,\u201d BSP Governor Eli M. Remolona, Jr. informed<\/p>\n","protected":false},"author":3,"featured_media":13689,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[2901],"class_list":["post-13688","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-sees-room-for-2-more-rate-cuts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>BSP Identifies Potential for Two Additional Rate Reductions - 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\/07\/03\/bsp-identifies-potential-for-two-additional-rate-reductions\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP Identifies Potential for Two Additional Rate Reductions - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"THE BANGKO SENTRAL ng Pilipinas (BSP) on Thursday announced there is capacity for two additional rate reductions this year as price growth stays manageable. \u201cThere\u2019s capacity [to lower] because inflation is subdued, and growth is slightly lower too. However, the reductions can\u2019t completely offset the deceleration in growth,\u201d BSP Governor Eli M. Remolona, Jr. informed\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wsj-crypto.com\/index.php\/2025\/07\/03\/bsp-identifies-potential-for-two-additional-rate-reductions\/\" \/>\n<meta property=\"og:site_name\" content=\"WSJ-Crypto\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-03T21:50:39+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/wsj-crypto.com\/wp-content\/uploads\/2025\/07\/Manila-Building-skyline-300x200.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"200\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"wsjcrypto\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Scritto da\" \/>\n\t<meta name=\"twitter:data1\" content=\"wsjcrypto\" \/>\n\t<meta name=\"twitter:label2\" content=\"Tempo di lettura stimato\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minuti\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/wsj-crypto.com\/index.php\/2025\/07\/03\/bsp-identifies-potential-for-two-additional-rate-reductions\/\",\"url\":\"https:\/\/wsj-crypto.com\/index.php\/2025\/07\/03\/bsp-identifies-potential-for-two-additional-rate-reductions\/\",\"name\":\"BSP Identifies Potential for Two Additional Rate Reductions - 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However, the reductions can\u2019t completely offset the deceleration in growth,\u201d BSP Governor Eli M. 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