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Philippines: 25bp Rate Cut to 5.25% (Consensus 5.25%) in Jun-25

• The Bangko Sentral Ng Pilipinas (BSP) reduced its Target RRP Rate by 25 basis points to 5.25%, a move that aligned with consensus forecasts and was prompted by a sharply lower inflation outlook for 2025.
• The decision reflects growing concerns over a global economic slowdown, persistent US trade policy uncertainty, and a widening domestic output gap, all of which argue for a more accommodative monetary stance.
• Future rate decisions will hinge on inflation dynamics, external policy shifts—especially from the US Federal Reserve—and the effectiveness of monetary easing in supporting domestic growth without compromising price stability

Philippines: 25bp Rate Cut to 5.5% (Consensus 5.5%) in Apr-25

• The BSP cut its policy rate by 25bps to 5.50%, aligning with expectations and marking a shift towards accommodation following the unexpectedly hawkish February hold.
• Substantial downward revisions to inflation forecasts, with 2025 inflation now seen at just 2.3%, support the easing decision and suggest scope for further rate reductions.
• Despite a dovish tilt, the BSP signalled a cautious, data-driven approach to additional cuts, with external headwinds and inflation risks dictating the pace of monetary easing.

Trump-ism And East Asia

• Donald Trump’s abandonment of the US-led international order and efforts to reshape global trade and finance do not bode well for East Asian economies that may find themselves forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.

By Alastair Newton

Philippines: Policy Rate Held At 5.75% (Consensus 5.5%) in Feb-25

• The BSP held its key rate at 5.75%, contradicting market expectations of a 25bp cut, citing persistent global economic uncertainties and a stable inflation outlook.
• Inflation risks for 2025 and 2026 are balanced, though upside pressures from utilities and downside risks from lower rice tariffs remain.
• The BSP signalled a cautious, data-dependent approach to easing, with future rate cuts contingent on further clarity regarding inflation trends and global economic developments.