IMF Advises Gradual Easing of Monetary Policy for Philippines Amid Inflation Targets

The International Monetary Fund recommends a measured approach to easing monetary policies in the Philippines as inflation aligns with targets. The Bangko Sentral ng Pilipinas recently made its first rate cut in years. Future projections show a moderated growth in the economy and a slight improvement in the current account deficit.

A considered easing of monetary policy is advised for the Philippines as inflation trends back towards targets, the International Monetary Fund (IMF) reported on Wednesday.

The Bangko Sentral ng Pilipinas (BSP) recently reduced its benchmark rate by 25 basis points to 6.25%, marking the first such cut in almost four years. With inflation expectations stabilizing, Elif Arbatli-Saxegaard, IMF mission chief, affirmed the appropriateness of continued gradual rate reductions.

Despite these indications, the IMF refrained from suggesting specific cuts for upcoming policy-setting meetings. BSP Governor Eli Remolona mentioned a potential 50-basis-point rate cut, conditional on economic fears. Meanwhile, projections for GDP growth for 2024 and 2025 have been trimmed due to soft consumption, with current account deficit predictions slightly improved.