Monthly Recap: Rates, tariff wars, and global uncertainty 

All eyes were on what the monetary authorities think about risks including an escalating tariff war.

With economic risks mounting, US policymakers extended their pause on rate cuts this month. In the Philippines, tepid inflation makes a case for the Bangko Sentral ng Pilipinas (BSP) to resume rate reductions.

Key points

• Domestic inflation is seen to average at a slower pace than previously forecast, leaving room open for BSP to continue easing policy rates.
• The US Federal Reserve extended its rate cut pause in its March meeting amid policy uncertainty and the ongoing tariff war.
• The USD/PHP spot dropped this month on concerns over dampened US economic growth as the tariff war intensifies.

Moving forward

• Metrobank maintains its GDP growth forecast of 5.8% for the year.
•  We also revised our inflation forecast to 3.1% for this year and 3.2% in 2026.
• Metrobank also maintains its forecast that the BSP and Fed will reduce policy rates by a total of 50-75 bps each, bringing the target Reverse Repurchase rate by year-end to 5.25% or 5.00% and the Federal Funds Rate to 4.00% or 3.75%.

Economic Updates     

Monthly Economic Update: Green light for easing? 

Subdued inflation leaves door wide open for easing

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