Bangko Sentral cuts policy interest rate by 25 bps

BSP Governor Eli Remolona Jr. —CONTRIBUTED PHOTO

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) trimmed the policy rate by another quarter point on Thursday, as benign inflation and slow economic growth gave monetary authorities more room to ease.

The decision brought the key rate that banks use as a guide when pricing loans to 5 percent. It also brought the cumulative reductions under the current easing cycle to 1.5 percentage points.

Data showed that inflation had cooled to 0.9 percent in July, the weakest pace in nearly six years, as rice prices plunged to a record low.

Meanwhile, the economy expanded 5.5 percent in the second quarter, up slightly from 5.4 percent in the first, with easing prices helping sustain household spending.

READ: Full BSP statement: Monetary Board reduces target RRP rate by 25 basis points

The BSP announced its latest monetary setting, which has been widely expected by the market, under a new format. /dda

READ: Goldman Sachs sees quarter BSP interest rate cut on Aug. 28