Monetary Board cuts key policy rates by 25 bps to 6.25%
Monetary Board cuts key policy rates by 25 bps to 6.25%
Transcript
00:00With the latest U.S. inflation rate hitting its lowest in May 2020, the Banco Central ng Pilipinas' Monetary Board
00:07saw it fit to shear or trim a quarter of a point or 25 basis points off a 6.5 key interest rate to 6.25%.
00:17This as the Monetary Board projects confidence on a cooling inflation moving forward, as our Soojin Kim reports.
00:26The Monetary Board at its policy meeting today decided to trim the BSP's target reverser purchase rate by 25 basis points to 6.25%.
00:36BSP Governor Eli Ramalona Jr. says headline inflation is projected to trend downward to within the government's 2-4% target range despite the uptick in July.
00:46We're somewhat more confident in the inflation numbers coming down.
00:51We see headline inflation trending downward. Meanwhile, and this is the first time that we're releasing this information,
01:01the risk-adjusted inflation forecast is 3.3% for 2026.
01:08Balance of risks to the inflation outlook continues to lean toward the downside for the rest of the year and 2025, with a modest tilt to the upside for 2026.
01:19This outlook is supported by well-anchored inflation expectations over the policy horizon.
01:26The downside risks are linked mainly to lower import tariffs on rice, while upside risks could come from the higher electricity rates and external factors.
01:35Despite tight financial conditions, Central Bank Chief says
01:39The Monetary Board also expects domestic demand prospects to hold firm.
01:45Second quarter GDP growth has been solid and the unemployment rate has declined.
01:51Public investment alongside easing price pressures and robust employment conditions are expected to support economic activity.
01:59The BSP says with inflation on a target consistent path, the macroeconomic outlook supports a more calibrated shift to a less restrictive monetary policy stance.
02:09Sujin Kim from the National TV Network for the New and Better Philippines.