BSP not rushing to cut rates despite steep GDP contraction in third quarter

ABS-CBN News

Posted at Nov 12 2020 12:45 PM

MANILA - The Bangko Sentral ng Pilipinas said Thursday it is not going to rush new rate cuts despite the Philippine economy's worse-than-expected contraction in the third quarter.

Gross domestic product shrank 11.5 percent in the July to September period despite the reopening of many areas of the economy, following strict COVID-19 lockdowns. 

The third quarter contraction was worse than the 8 percent to 9 percent forecast of some analysts.

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Despite this, BSP Governor Benjamin Diokno said the central bank is not necessarily going to rush to cut rates. Monetary authorities cut the policy rate to 2.25 percent this year, which is already a historic low.

Diokno assured the public however that monetary authorities have "sufficient conventional ammunition" amid the COVID-19 crisis.

The central bank chief also pushed for a shift in unemployment assessment from quarterly to monthly to allow regulators to make timely assessments.