MANILA -- The Bangko Sentral ng Pilipinas watching inflation data for a "clear mandate" to further reduce borrowing costs, an analyst said Wednesday.
Monetary authorities are looking for inflation to come in at below the midpoint of target. Official data for June is due out on Friday.
The 25-basis point cut in the overnight borrowing rate could come as early as August, said HSBC chief economist for Asia Joseph Incalcatera.
The forecast from HSBC also includes a further 100-basis point reduction in the reserve ratio requirement for banks.
It now takes only "a few months" for the rate cuts to reflect in the real economy, given the BSP's shift to the interest rate corridor system, Incalcatera said.