BSP hints of more rate cuts this year 

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. anticipates the Monetary Board “to cut a few more times” this year, saying a reduction is “on the table” during the rate setting meet next month, according to a report by Philippine News Agency.

He told reporters Tuesday that the policy-making MB remains on the easing cycle, but clarified that timing and magnitude will depend on inflation data and other economic indicators.

“So far, our measures of policy uncertainty have spiked. But the market measures of uncertainty have not really spiked,” he said during the Tuesday Club meeting of journalists at a hotel in Mandaluyong City.

On the other hand, the BSP chief said a 5-percent reserve requirement ratio (RRR) is still high, but further cuts must be gradual to manage liquidity.

Central banks use RRR as a tool to control liquidity in the financial system. It represents the percentage of bank’s total deposits that it must keep in reserve.

Effective March 28, 2025, reserve requirement for universal and commercial banks will be 5 percent, down by 200 basis points.

Meanwhile, commenting on the article that the Philippines sold the most gold worldwide last year, Remolona pointed out that holding gold is often seen as a valuable asset but is actually a poor investment as its prices are highly volatile and returns are generally low.

He added holding gold involves costs, such as custody fees. Most of the country’s gold assets are in the Bank of England (BOE).

“Now that gold prices have increased, the amount of gold we hold has exceeded the ideal ratio of 8 to 10 percent, so we decided to sell,” he said in mixed English and Filipino.

“No gold has left the BSP. The gold was sold, but it was likely bought by someone who also keeps it at the Bank of England - it was just transferred to a different cage. However, the payment went into our reserves,” Remolona added.