Manila: Fitch Solutions unit BMI forecasted that the Bangko Sentral ng Pilipinas (BSP) will cut policy rates anew in June following a 25 basis points (bps) easing during the Monetary Board meeting on April 10.

According to Philippines News Agency, BMI maintains its forecast that the BSP will further lower rates by 50 basis points to 5 percent in 2025. BMI expressed confidence that the BSP will consider another 25bps cut at the next meeting scheduled on June 19. The slowing down of the inflation rate, which stood at 1.8 percent in March this year, is cited as a contributing factor to the possible rate cuts by the central bank.

BMI projected inflation to average 2.6 percent this year, which they say will provide the BSP with the flexibility for further rate cuts. Growth concerns have risen amid US President Donald Trump's tariffs, which have compounded the challenges faced by the Philippine economy. BMI emphasized that prompt policy support will be crucial for achieving the government's 6 percent lower bound growth target.

BMI further noted that if the higher US tariff for the Philippines is implemented at 17 percent, following the 90-day universal 10 percent rate, the central bank may be forced to cut rates more aggressively to support economic activity.