Bangko Sentral's Diokno signals 50-point interest rate cut in 2020


Posted at Dec 13 2019 04:24 PM | Updated as of Dec 13 2019 05:03 PM

Bangko Sentral ng Pilipinas’ (BSP) new governer, Benjamin Diokno during an interview with Cathy Yang for ANC’s The Boss, held at the BSP headquarters in Manila on March 12, 2019. George Calvelo, ABS-CBN News

MANILA -- Bangko Sentral ng Pilipinas Governor Benjamin Diokno signaled on Friday that he could cut the benchmark borrowing rate by another 50 basis points in 2020, as inflation continued to ease and economic growth regained momentum.

The BSP kept the overnight borrowing rate at 4 percent during its last policy meeting for the year on Thursday after slashing 75 basis points off the benchmark throughout 2019.

Diokno told ANC that a 50-basis point cut could happen next year. He was asked to confirm his statements in an interview on Bloomberg Television earlier Friday.

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A 50-basis point reduction in 2020 would bring the overnight rate to 3.5 percent. It was kept at 3 percent until 2018, when inflation at near 10-year highs triggered a cumulative 175-basis point increase.

Inflation in November crept up to 1.3 percent as the effect of a high base from the previous year waned. However, it was still below the BSP's 2-4 percent goal.

Gross domestic product growth in the third quarter regained momentum to 6.2 percent after the government ramped up spending that was held back due to the delayed passage of the 2019 budget.