MANILA (April 10): The Philippine central bank resumed its easing cycle on Thursday, as expected, cutting its key policy rate by 25 basis points and signalling more reductions to come in "baby steps" to help the economy cope with global challenges.

The quarter-point reduction, which brought the benchmark interest rate to 5.50% — predicted by 20 of 23 economists in a Reuters poll —- came after data last week showed inflation eased to a near five-year low of 1.8% in March.

"The Monetary Board noted the more challenging external environment, which would dampen global GDP growth and pose a downside risk to domestic economic activity," Bangko Sentral ng Pilipinas Governor Eli Remolona told a press conference.

Though less affected than some of its neighbours, the Philippines has not been spared from global trade wars triggered by US President Donald Trump's tariff barrage, with Washington also threatening levies on Filipino exports.

In a major reversal, Trump on Wednesday announced he would pause the implementation of hefty tariffs shortly after they took effect after they triggered carnage in global financial markets and sparked recession fears.

Asked how the central bank was navigating global uncertainties, Remolona said: "With difficulty."

Central bank assistant governor Zeno Abenoja said that hitting the low end of the Philippine government's growth target of 6.0%-8.0% is still possible this year after last year's 5.7% expansion.

The BSP cut rates at three consecutive meetings from August last year, but then surprised markets by pausing at its February review.

Remolona said there could be more cuts this year but they would be done 25 basis points at a time.

"We contemplate further cuts this year. We can't tell you exactly how many more cuts, but definitely further cuts this year," he said. "We think we will have completed the easing cycle in 2025."

The central bank lowered this year and next year's risk-adjusted inflation forecasts to 2.3% and 3.3% in 2026, respectively, from previous estimates of 3.5% and 3.7%, well within its 2%-4% target.

"Lower inflation rates that we're looking at give us more degrees of freedom," Remolona said.

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