MANILA: The Philippine central bank cut its policy rate by 25 basis points to 5.25%, its governor announced on Thursday, taking the rate to its lowest level in two-and-a-half years.

A Reuters poll showed 22 out of 25 economists had forecast the Bangko Sentral ng Pilipinas to lower its target reverse repurchase rate. The rest expected rates to stay unchanged at 5.50%.

BSP Governor Eli Remolona said in a briefing that while the outlook for inflation had moderated and there was a need for accommodative policy, there were risks from rising geopolitical tensions and external policy uncertainty that had to be monitored.

The BSP cut rates at three consecutive meetings from August last year, but then surprised markets by pausing at its February review. It delivered another 25 basis point rate cut in April.

Last month, Remolona had said the BSP had room to deliver two more 25 basis point rate cuts this year but they may not be at consecutive meetings. - Reuters