The Bangko Sentral ng Pilipinas (BSP) cut policy rates by a quarter percentage point on Thursday, as expected by the market, after the government announced the economy posted the worst performance in two decades in the first quarter.

The monetary authority cut its overnight borrowing rate to 4.25 percent, a fresh 17-year low, and the lending rate to 6.25 percent, bringing cumulative interest rate cuts to 1.75 percentage points since December as falling inflation alllowed it to help lift slowing economic growth.

Nine of 11 economists had forecast the 25 basis point cut in a poll earlier on Thursday, while two had predicted a 50 basis point reduction. They were polled after the government announced that first quarter GDP contracted 2.3 percent on a seasonally adjusted basis from the previous quarter.