The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) will likely deliver another interest rate cut during the MB's next meeting on Aug. 28.

"Things look good, we have room for at least one more cut in the policy rate," BSP Governor Eli Remolona Jr. said during the 2025 Economic Journalists Association of the Philippines Economic Forum on Monday.

"We’ve cut already five times in the key rate, and we’ve cut [banks’] reserve requirements. Both measures help stimulate growth in the economy without stoking inflation.”

The BSP has so far reduced policy rates by a total of 125 basis points since last year.

The latest cut brings the interest rates on the overnight deposit and lending facilities to 4.75 percent and 5.75 percent, respectively.

Remolona said that depending on data, the BSP may further reduce rates twice this year.

He said inflation is projected to settle at 2 percent this year which is the lower end of the government's 2 percent to 4 percent target.

"In terms of inflation, we think we'll hit 2 percent in 2025. That's much better than other emerging markets. They would hit 3.1 percent, and other advanced economies, we think, will hit 3.3 percent so, lower inflation than both advanced economies and emerging markets. So, that's the broad picture," Remolona said.

Headline inflation decelerated to a nine-year low of 0.9 percent in July this year.

This brought the year-to-date inflation rate to 1.7 percent.

PNA PHOTO