BSP open to more rate cuts in light of virus threat

The Bangko Sentral ng Pilipinas (BSP) may ease policy rates further than originally planned in light of the threat of coronavirus disease 2019 (COVID-19), its top official said Thursday.

In a press conference in Manila City, BSP Governor Benjamin Diokno said he is not ruling out more rate cuts than the 50 basis points he earlier committed to.

"As you know, I committed to 50 basis points this year, so we're down by 25 basis points, so we still have 25 basis points," he told reporters.

The Monetary Board of the BSP decided to cut key policy rates by 25 basis points earlier this month—the overnight borrowing rate to 3.75%, the overnight lending to 4.25%, and the overnight deposit rate to 3.25%.

"We have a lot of monetary space and fiscal space so if things deteriorate much beyond what we have originally forecasted, we might consider additional cuts in reserve requirement or in the interest rate or policy rate," Diokno said.

"But when that will happen, of course, that will depend on our assessment of the situation and the conditions," he explained.

The remarks come after the further spread of COVID-19, prompting the Philippines to ban travel to South Korea. — BM, GMA News