Eli Remolona, Governor of the Bangko Sentral ng Pilipinas (BSP), indicated on Friday that there may be "two more cuts" to interest rates this year, although he emphasized that these cuts are "not necessarily consecutive." Remolona expressed a preference for gradual rate reductions in increments of 25 basis points, while acknowledging the current macroeconomic environment poses challenges for many central banks, describing it as "new territory".

He noted that recent data suggest there is ample room for cuts, particularly due to low inflation levels.

The Monetary Board of the BSP is set to convene for its next rate decision on June 19. With inflation reports showing a significant decrease, Remolona highlighted that the economic data supports the case for lower rates, which could help stimulate economic growth.

The comments come in the context of ongoing discussions within the Philippine economic landscape, where there is a call for more aggressive monetary policy actions to sustain recovery efforts.

Remolona's views were contrasted with those of local economists, such as the late Enrico Villanueva, who criticized the BSP's cautious approach to rate adjustments despite evidence of declining inflation and underperforming GDP growth.

Villanueva advocated for more substantial stimulus measures instead of a gradualist approach.

This ongoing dialogue reflects broader concerns about the pace of the economic recovery in the Philippines, as policy-makers weigh the risks and benefits of adjusting interest rates in a low inflationary context.