BAGUIO, Philippines — The Philippine central bank said on Friday an interest rate cut may be considered next month when it reviews monetary policy for the first time this year.
“It’s on the table,” central bank Governor Eli Remolona told reporters when asked if another rate cut was possible in the next meeting.
Remolona’s remarks follow data on Thursday showing the economy grew slower than expected in the fourth quarter of last year, weighed down by a contraction in farm output and weak domestic demand.
“We’re growing at a little bit below capacity,” Remolona said.
The U.S. Federal Reserve’s actions will affect what the Bangko Sentral ng Pilipinas will do, but it may not necessarily follow its moves, he added. The Fed held interest rates steady on Wednesday and its chair said there was no rush to cut them again.
Last month, the BSP cut its key interest rate by 25 basis points for a third straight meeting to 5.75%, but flagged at the time that further easing this year might come in “baby steps” as inflation remained a concern.
The central bank’s monetary board will meet on Feb. 13 to review monetary policy, its first out of six meetings this year.
Philippine annual inflation quickened for a third straight month in December to 2.9% on higher food and utility costs, greater than the previous month’s 2.5% print. Inflation last year averaged 3.2%, within the central bank’s 2% to 4% target range.
—Reporting by Karen Lema; Editing by Martin Petty
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