MANILA -- Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday he would cut the benchmark borrowing rate by 25 basis points or higher later later this week to fight the economic fallout of the coronavirus disease epidemic.
Cutting the overnight borrowing rate by as much as 50 basis points on Thursday "will depend on the discussions," Diokno said. The Monetary Board will also consider lower oil prices in the world market and the Federal Reserve's 50-basis point cut overnight will be "huge factor" in the Philippines' decision, he said.
President Rodrigo Duterte placed Metro Manila under a 1-month long community quarantine until April 14. Work from home is encouraged and travel to and from the region is restricted except for food, essential supplies and some workers. Malls were shut except for supermarkets and drugstores.
"The 25 basis points, this is almost a certainty. It could go even higher because of the seriousness of the situation and the sharp drop in the price of oil," he said.
"We shall have to take into account the serious spread of COVID-19, the consensus is that things will get worse before it gets better," he said.
The BSP has so far rolled back 100 of the 175-basis point increase from 2018. "Even if we do 50, that's another 25. You have to consider that globally, central banks have been cutting."
The peso has been "fairly stable" and at the low end of the economic team's assumptions, he said.