(Bloomberg) — The Philippines cut its benchmark interest rate by a quarter-percentage point Thursday, resuming policy easing after economic growth and inflation slowed.
Bangko Sentral ng Pilipinas reduced the overnight borrowing rate to 4.25%, it said in a statement. Twenty-three of the 26 economists surveyed by Bloomberg predicted the decision.
The move comes a day after central banks in India, New Zealand and Thailand surprised with their rate decisions as policy makers take stronger steps to counter global economic risks.
- Data on Thursday showed the Philippine economy grew 5.5% last quarter, the slowest pace in more than four years, and well below the median estimate of 5.9% in a Bloomberg survey of economists
- The central bank cut interest rates by 25 basis points in May and paused in June. Benign inflation due to lower food prices, easing oil costs and a high statistical base effect leaves room for further monetary easing, economists say
- The Federal Reserve’s rate cut last week has given Asian central banks room to pursue looser monetary policy
- Inflation in July eased to a two-year low of 2.4% from 2.7% in June
- Governor Benjamin Diokno said earlier this week he sees about 50 basis points of interest rate cuts for the rest of the year, with the timing likely to depend on economic data
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