The Philippine central bank slashed its key interest rate by a quarter-point for a second consecutive session, and a third time thus far this year, as inflation slowed to its weakest level in nearly three years amid weak economic growth.

The Monetary Board of the Bangko Sentral ng Pilippinas, or BSP, on Thursday decided to lower the overnight reverse repurchase facility rate by 25 basis points to 4.00 percent. The move was in line with economists' expectations.

The previous change in the rate was a quarter-point reduction in August, after a surprise similar size cut in May, which was the first since 2016.

Late August, BSP Governor Benjamin Diokno had signaled that the rate will be cut by another quarter-point before the end of this year.

However, Alex Holmes, an economist at Capital Economics, expects more cuts in coming quarters with growth likely to disappoint and subdued price pressures. The economist forecast two rate cuts, that will take the policy rate to 3.50 percent.

The central bank expects inflation to settle within the lower half of the target range of 2-4 percent until 2021. The balance of risks to the inflation outlook shifted toward the upside for 2020 and tilted to the downside for 2021.

The bank had earlier lowered its inflation forecast for 2019 to 2.5 percent from 2.6 percent.

The board viewed that prospects for global economic growth are likely to remain weak owing mainly to uncertainty over trade policies. Nonetheless, firm domestic spending and progress on policy reforms will serve as a buffer against global headwinds.

The economy had expanded 5.5 percent in the second quarter, which was the weakest growth in four years. The government targets 6-7 percent growth for this year.

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