Citing benign trajectory amid downside risk to the growth outlook, PNB economist Jun Trinidad sees the BSP cutting key interest rates by 25 basis points this March 19 and another 25 basis points on May 21.As such, PNB revised its outlook on BSP interest policy rate by yearend to 3.25 percent from 3.75 percent previously.
“Similar to the recent [US Federal Reserve] recent rate cut decision, we expect BSP to front-load monetary accommodation in the first half 2020 to mitigate COVID-19’s downside risks that are likely concentrated in first quarter 2020 while exploiting local inflation’s gradual path to normalization,” Trinidad said.
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