The Bangko Sentral ng Pilipinas’ (BSP) surprise 25-basis-point reduction in the key policy rate to 4.75% is receiving strong endorsement from the business community, which views the move as a timely and proactive measure to stimulate private sector expansion amid moderating economic forecasts and fiscal pressures.
Manny Ocampo, President and Chief Operating Officer of the Investment & Capital Corporation of the Philippines (ICCP), described the rate cut as a “positive” and “proactive” step by the BSP. He anticipates the move will directly benefit businesses looking to grow.
“Lending rates of banks should adjust in a way that will make credit cheaper over the coming months,” Ocampo noted. “That’s good for businesses that are looking at expanding.”
While the central bank cited softened demand and growth outlook as a major rationale, Ocampo highlighted the critical role of private enterprises in sustaining the economy, particularly in light of recent government expenditure limitations.
“Cutting rates is a way for BSP to say that maybe the private sector could lead on consumption spending as well as making new investments,” he explained, positioning the rate cut as an explicit encouragement for corporate action.
Despite current market volatility, Ocampo remains cautiously optimistic about the Philippine Stock Exchange Index (PSEi), stressing that fundamental value will eventually prevail.
“Markets don’t like uncertainty. But once the dust settles, investors will start looking at companies with good long-term growth prospects,” he stated.
Looking ahead, Ocampo projected a potential recovery in the PSEi to the 6,300–6,400 range within the next six months. This outlook is anchored on expectations of “pretty decent earnings returns” from corporations in the third and fourth quarters.
“We’re not yet looking at a recession,” he affirmed.
Acknowledging the market’s underperformance over the past decade, Ocampo still sees promise, pointing to opportunities for a market reset and renewed engagement from investors seeking value.
