Recto: Rate cut could reach 75 bps in 2025
MPs of Momentum protest with flares during the plenary session of the Hungarian parliament in Budapest, Hungary, Tuesday, March 18, 2025. BOGLARKA BODNAR/MTI VIA AP
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OCAL monetary officials could reduce key policy rates by up to 75 basis points this year to propel economic growth beyond the lower-end target, banking on cooling inflation and increased investments, according to the Finance chief. In a televised interview on Wednesday, Finance Secretary Ralph G. Recto said he expects a 50- to 75-basis-point reduction in key policy rates this year, which will help propel growth, consumption and investments. With inflation cooling to 2.1 percent in February, settling at the lower end of the government’s 2 to 4 percent target range, Recto said “there is room for a rate cut” in the Monetary Board’s
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meeting on April 10. “We’re in an easing cycle. It’s a high probability that we could do a rate cut for our next meeting,” said Recto, who also sits as member of the Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas. “If we could reduce it in the next two years by 150 basis points, probably even higher,” Recto added. While a rate cut is on the table, Recto said the Philippine peso is closely watched for any weakness despite being “relatively stable” at the 57-level, between the government’s targets 56 to 58 levels. BSP Governor and Chairman of the Monetary Board Eli M. Remolona said earlier the BSP could
cut rates in its meeting in April. Remolona said the BSP could cut rates by up to 50 bps, even more, in April “if things look much worse than we thought or what we call a ‘hard landing.’” “But as long as we’re more or less on track, it will be [a 25-bps cut] at a time,” Remolona quickly added. In its previous meeting, the BSP kept its key policy rates unchanged at 5.75 percent due to global uncertainties and will recalibrate its models to better account for these uncertainties.
PHL to grow to up to 7 percent
DESPITE being in a “very challenging global environment,” Recto said the Philippines could grow up to 7 percent, even higher later on, if in-
terest rates would go down, coupled with more investments following the passage of the Create More law. The Finance chief also remains optimistic that the Philippines would hit at least a 6-percent growth, in line with the forecasts of the World Bank and the International Monetary Fund. “Our macroeconomic fundamentals are very good. Unemployment is down. The middle class is growing. We’re investing more than 5 percent of GDP in infrastructure,” Recto said. The upcoming midterm election is also seen as a contributor to hitting the government’s target of at least a 6-percent growth due to increased spending. Reine Juvierre S. Alberto
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BOP BACK TO SURPLUS, BUT EXPERTS FLAG RISKS www.businessmirror.com.ph
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By Reine Juvierre S. Alberto
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@reine_alberto
HE Philippines’s balance of payments position swung back to a surplus in February, the highest in five months, but underlying challenges must be addressed, according to experts. Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the BOP reverted to a $3.1-billion surplus in February 2025, a turnaround from a $196-million BOP deficit during the same month in 2024. “The BOP surplus reflected the national government’s net foreign currency deposits with the BSP which include proceeds from ROP Global Bonds, and net income from the BSP’s foreign investments,” the central bank said. The BOP also improved after recording a deficit of $4.078 billion in January 2025. The BOP is a summary of the Philippines’s economic transactions with the rest of the world for a specific period. A BOP surplus position means there are more exports or inflows than imports or outflows, while a deficit means there are less. While it’s impressive that the BOP position turned around, indicating a substantial improvement in the country’s economic activities, Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas said the cumulative deficit suggests certain underlying challenges See “BOP,” A2
SM NORTH EDSA BUSWAY CONCOURSE NOW READY TO SERVE COMMUTERS Commuters in the north now have another convenient and safe transportation access point as the SM North Edsa Busway Concourse
formally opened last March 13. The new facility features well-lit and covered walkways, with ramps and elevators that ensure accessibility for all commuters, particularly senior citizens, pregnant women, and persons with disabilities (PWDs). CONTRIBUTED PHOTO/SM SUPERMALLS
DOTR ENGAGES MANIBELA AS TRANSPORT STRIKE PLANS SET By Lorenz S. Marasigan
T RIVER REVAMP MMDA Chairman Don Artes, San Juan City Mayor Francis Zamora,
Rep. Bel Zamora, and Vice Mayor Angelo Agcaoili lead the groundbreaking for the Neighborhood Upgrading Project with Nature-Based Solutions along the San Juan River Easement-San Juan City Linear Park at F. Manalo Street, Barangay Batis, San Juan City, on Wednesday, March 19, 2025. The project aims to revitalize underutilized spaces into a vibrant, community-driven linear park featuring vertical gardens, rainwater harvesting systems, cisterns, rain gardens, and community pavilions to enhance sustainability and urban resilience. NONOY LACZA
HE Department of Transportation (DOTr) intends to engage in discussions with the transport group Manibela, following the latter’s declaration of a three-day nationwide transport strike scheduled from March 24 to 26. In a streamed press conference, Manibela President Mar Valbuena slammed the Land Transportation Franchising and Regulatory Board (LTFRB) for supposedly “lying” about the Public Utility Vehicle Modernization Program (PUVMP), now called the Public Transport Modernization Program (PTMP).
“The LTFRB is saying that 86 percent have already consolidated and complied. This became the trigger for why our provisional authority was not renewed and why we could no longer register,” he said. He was referring to the industry consolidation initiative under the PUVMP. This refers to the government’s move that required PUV operators to form cooperatives or corporations for them to gain access to business financing to acquire modern units. The consolidation of franchises ended in 2024. Valbuena said the group has See “DOTR,” A2
Think tank sees Q1 PHL rebound amid global slump By Bless Aubrey Ogerio
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@blessogerio
XPECT Filipinos to spend more in the first quarter of 2025, with a boost from election-related government spending, low inflation and more jobs from infrastructure projects, supported by falling crude oil and global rice prices, according to a think tank. The First Metro Investment Corporation-University of Asia and the Pacific (FMIC-UA&P) Capital Market Research expects a “sanguine” outlook for the country in Q1 2025 and the rest of the year, projecting 2.4-percent growth in the first quarter and 2.8 percent for the full year, despite a global slowdown and weak Q4 2024 GDP. (See: https:// businessmirror.com.ph/2025/01/30/ q4-gdp-growth-at-5-2-as-typhoon-
battered-farm-sector-shrinks/) “Inflation has slowed to 2.1 percent year-on-year in February and no resurgence appears in sight as crude oil prices remain below $70 per barrel and rice prices [even abroad] have plunged to below $400 per metric ton in Vietnam,” FMIC-UA&P said in its latest Market Call report. The think tank also expects liquidity growth to pick up, citing an anticipated rate cut from the Bangko Sentral ng Pilipinas (BSP) in April and the continued effect of the reserve requirement ratio (RRR) reduction. Job growth is seen accelerating in March and April, with bonds and equities markets likely to stage stronger recoveries after the April 15 income tax deadline. See “Think tank,” A2
PESO EXCHANGE RATES n US 57.2900 n JAPAN 0.3839 n UK 74.5171 n HK 7.3740 n CHINA 7.9315 n SINGAPORE 43.0655 n AUSTRALIA 36.4250 n EU 62.7096 n KOREA 0.0395 n SAUDI ARABIA 15.2761 Source: BSP (March 19, 2025)