The Governor of the Philippine central bank, Eli Remolona, indicated on Tuesday that the country is on track for additional interest rate cuts, despite uncertainties surrounding the global economy in the wake of Donald Trump’s presidential victory. Remolona suggested that another quarter-point reduction in the key policy rate could be implemented as early as December, with the possibility of cumulative cuts totaling 100 basis points in 2024.
“We are still in the easing cycle,” Remolona confirmed, reaffirming that the central bank’s rate reductions are likely to occur in quarter-point increments.
This stance comes even as Trump’s unexpected win in the U.S. elections has introduced a layer of uncertainty regarding global economic conditions and future policy decisions, particularly in the U.S. Federal Reserve. Following the election, expectations for an immediate Fed rate cut have been tempered, especially after Federal Reserve Chairman Jerome Powell suggested that there is no urgency to further reduce rates.
Remolona, however, expressed confidence that inflation in the Philippines will remain within the central bank’s target range of 2%-4% for the foreseeable future, which provides the BSP with room to continue its easing cycle. He also mentioned that the bank has been making small interventions in the foreign exchange market to stabilize the peso, though he emphasized that gradual currency depreciation is not necessarily a cause for inflation concerns.
“We monitor the swings over a few months, not on a daily basis,” Remolona said, noting that the peso has depreciated by nearly 1% this month, inching closer to its record low of 59 to the dollar. This slide in the currency comes amid fears of potential tariffs from the U.S. under Trump’s administration.
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