Manila: The weakening of the US dollar against the Philippine peso due largely to market uncertainties caused by the Trump administration's tariff policies is seen as a leeway for the Bangko Sentral ng Pilipinas (BSP) to cut rates further.

According to Philippines News Agency, in an online briefing on Thursday, EastWest Bank chief executive officer Jerry Ngo stated that upticks of commodity prices in the US are anticipated in the near term due to the US' higher reciprocal duties on trade partners. This situation has led to the weakening of the US dollar against the local currency and a rally in the local bourse.

Ngo emphasized that the current development provides the central bank 'more leeway to cut rates.' He noted that there is less concern about the dollar strengthening against the peso and creating inflationary pressure from that direction.

He further explained that the recent increases in commodity prices in the US are primarily artificial due to the new tariff regime. Ngo believes this could be beneficial for the country and suggests that deliberate, judicious approaches are the appropriate method. He expressed confidence in the leadership of the central bank.

On April 10, the BSP's policy-making Monetary Board reduced the central bank's key rates by 25 basis points after citing a more manageable inflation outlook and the challenging global environment. These factors provided space for additional easing in the central bank's key rates. This adjustment brought the BSP's Target Reverse Repurchase Rate to 5.50 percent, the interest on the overnight deposit rate to 5 percent, and the overnight lending facility to 6 percent.

BSP Governor Eli Remolona earlier indicated the possibility of additional rate cuts in the coming months, which economists support due to expectations of a slowdown in the domestic inflation rate and a fragile global economy.