By Joann Villanueva/Philippine News Agency
MANILA — Philippine monetary officials have already made up their mind to further cut Bangko Sentral ng Pilipinas’ (BSP) key policy rates but BSP Governor Benjamin Diokno said they are still waiting for the right time to go ahead with it.
“We already have a decision but we are just studying how big the adjustment will be and the timing,” he told journalists Friday.
BSP’s policy making Monetary Board (MB) will have its fifth rate-setting meet for the year on August 8.
Last May, it cut the BSP’s key rates by 25 basis points after noting that domestic inflation continues to go down, which boosted rate cut proposals.
In 2018, the Board raised the central bank’s key rates by a total of 175 basis points due to elevated inflation rate, which peaked at 6.7 percent in September and October.
It continued to decelerate to 3 percent last April but posted an uptick to 3.2 percent the following month.
Last June, the rate of price increases made a U-turn and declined to 2.7 percent, which monetary officials said validated their projection about a sustained decline in the inflation rate, which is seen to average at 2.7 percent this year.
On July 30 to 31, 2019, the Federal Open Market Committee will have another meeting and rate cut expectations have risen following Fed Chair Jerome Powell’s statement in US Congress about the need to slash key rates to support the growth of the world’s largest economy, which he said, is being affected by global trade concerns.
Diokno said the Fed’s decision, along with the report on the July 2019 inflation rate that the Philippine Statistics Authority is scheduled to release on August 5, and the gross domestic product report for the second quarter will be the major factors influencing their next policy action.
He said the Fed’s decision “will be an additional input to our decision” but stressed that “we decide independent of the decision of the US Fed.”
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