Another 25-basis-point (bp) interest rate cut by the Bangko Sentral ng Pilipinas (BSP) is widely expected at its monetary policy meeting next month, as inflation slides and economic growth weakens.

In a May 9 report, Deutsche Bank Research said the lower-than-expected 5.4-percent gross domestic product (GDP) growth in the first quarter, coupled with the over five-year-low 1.4-percent headline inflation rate in April, "strengthens our conviction of another 25-bp rate cut in the BSP's June meeting."

Deutsche Bank Research noted that Bloomberg quoted BSP Governor Eli M. Remolona Jr. as saying last week that up to 75 bps in rate reductions are possible for the rest of the year, bringing the policy rate down to 4.75 percent from 5.5 percent.

"If implemented, this could imply rate cuts in three of the four remaining Monetary Board (MB) meetings this year, assuming it keeps to its preference of gradual reductions. Recall that in the BSP's April meeting, Governor Remolona had mentioned only 25-50 bps in further cuts," Deutsche Bank Research said. The remaining MB policy meetings in 2025 will be in June, August, October, and December.

Goldman Sachs Economics Research said in a May 6 report that "we continue to expect the BSP to cut two more times (25 bps each) in 2025, bringing the policy rate to five percent in the third quarter."

This means that Goldman Sachs Economics Research expects rate cuts in June and August.

Also citing the BSP chief's pronouncement last week, Capital Economics senior Asia economist Gareth Leather noted that the think tank has long held a more dovish forecast that the central bank will slash key interest rates by a total of 100 bps this year, starting with the 25-bp cut in April that resumed the easing cycle.

"The weakness of the inflation and GDP figures appears to have prompted a rethink at the BSP, which until recently had sounded cautious on the prospect of significant further rate cuts," Leather said in a May 9 report.

The Economist Intelligence Unit (EIU) similarly anticipates a 25-bp BSP rate cut in June, its Asia analyst Kalyani Honrao and Asia-Pacific regional director Alex Holmes said in a May 7 report.

"The BSP has been easing policy and will continue to do so, aided by low inflation and motivated by supporting the economy through the worsening external environment... We expect further easing in 2026," EIU said in a subsequent May 8 report.

EIU cited falling food prices, especially of the Filipino staple rice, as a top driver of downward inflation.

"We expect this trend to persist in the coming months, further supporting a cooling of food price inflation. In addition to this, the resumption of the administration's ₱20-per-kilogram (kg) rice program from May 13 will also help to relieve cost-of-living pressures," EIU said, referring to President Ferdinand Marcos Jr.'s campaign promise before winning the presidential election in 2022.