Fitch Solutions unit BMI forecasted that the Bangko Sentral ng Pilipinas (BSP) will cut policy rates anew in June following a 25 basis points (bps) easing during the Monetary Board meeting on April 10.

“We maintain our forecast that the BSP will further lower rates by 50 basis points to 5 percent in 2025,” BMI said. “What we can say with confidence is that the BSP will look for another 25bps cut at the next meeting scheduled on June 19.”

BMI cited that the slowing down of inflation rate, which stood at 1.8 percent in March this year, contributes to the possible rate cuts by the central bank.

As BMI projected inflation to average 2.6 percent this year, it said this will give the BSP the flexibility for another rate cuts.

BMI further said growth concerns have risen to the fore amid US President Donald Trump’s tariffs which have compounded the challenges faced by the Philippine economy.

“Prompt policy support will be crucial for achieving the government’s 6 percent lower bound growth target,” it said.

BMI added that if the higher US tariff for the Philippines is eventually implemented at 17 percent, after the 90-day universal 10 percent rate, the central bank may be forced to cut rates more aggressively to support economic activity.

PNA PHOTO