Downward inflation augurs well for the Bangko Sentral ng Pilipinas' (BSP) monetary policy easing ahead of the US Federal Reserve, according to the think tank Capital Economics.

In a Sept. 13 report, Capital Economics senior Asia economist Gareth Leather and assistant economist Harry Chambers noted market expectations that the US Fed will likely cut interest rates by 25 basis points (bps) in the coming week.

"But for other Asian central banks, domestic factors tend to matter more than the actions of the Fed, and it is notable that the relationship between US interest rates and domestic interest rates has historically been weak," Capital Economics said.

As such, "while we expect policymakers in South Korea, Thailand and the Philippines to cut rates soon, this has more to do with the mounting worries about growth and fading concerns about inflation, than anything the Fed is doing," the think tank said.

The Monetary Board, the BSP's highest policy-making body, already lowered the key overnight rate by 25 bps to 6.25 percent last month.

As food price hikes eased, August headline inflation fell to a seven-month low of 3.3 percent, bringing the eight-month average to 3.6 percent or within the BSP's three to four percent target band.

Since Capital Economics expects full-year inflation to average 3.5 percent this year and further slow to 3 percent next year, it had forecasted two more BSP rate cuts of 25 bps each during the monetary policy stance meetings scheduled in October and December.