DBS: BSP should consider another rate cut this year

Posted at 10/02/2012 10:46 AM

MANILA, Philippines - Singapore-based investment bank DBS says the Bangko Sentral should consider another interest rate cut this year to give the Philippine economy enough cushion against a global slowdown. 

"The global outlook remains challenging amid a slowdown in the major economies and external demand will continue to drag," DBS said. 

DBS doubts the US and the euro zone would be able to solve their fiscal problems anytime soon.

It adds the Bangko Sentral has room to bring down interest rates because inflation is expected to average just 3.3% this year. That's the lower end of the BSP's inflation target range of 3 to 5%.

The BSP's overnight borrowing rate stands at a record low of 3.75%, after three rate cuts earlier this year. - ANC