UPDATE 2-Philippine c.bank surprises with 5th rate cut this year as economy struggles

* Central bank cuts rate to record-low 2.0%
* Cbank chief says uncertainty remains elevated
* Rates cut by total 200 bps this year

(Adds analysts comments)
By Neil Jerome Morales and Enrico Dela Cruz
MANILA, Nov 19 (Reuters) - The Philippine central bank
delivered a surprise interest rate cut on Thursday, its fifth
reduction this year, as damage from a series of typhoons and
surging coronavirus infections heap more pressure on the
sputtering economy.
The Bangko Sentral ng Pilipinas (BSP) lowered the rate on
the overnight reverse repurchase facility PHCBIR=ECI by 25
basis points to a new low of 2.0%. It also cut the rates on the
overnight deposit and lending facilities to 1.5% and 2.5%,
respectively.
Only two of 11 economists Reuters surveyed ahead of
Thursday's policy review had expected the BSP to cut rates by a
quarter point. Most of them had forecast the central bank would
remain on hold as it assessed the impact of earlier easing.
The BSP has now slashed rates by 200 bps this year,
aggressively providing support for an economy that contracted
more than expected in the third quarter as demand remained weak
and government spending slowed. Indonesia's central bank also confounded expectations on
Thursday and cut its rates to a record low to help pull the
coronavirus-hit economy out of its first recession in over 20
years. OF UNCERTAINTY
The BSP said policy will remain accommodative in the coming
months and the timing of an exit from unprecedented easing
measures will depend on inflation and pace of economic recovery.
"Muted business and household sentiment and the impact of
recent natural calamities could pose strong headwinds to the
recovery of the economy in the coming months," Governor Benjamin
Diokno said.
Rising coronavirus cases globally also kept the uncertainty
elevated, he said.
Moreover, six cyclones have hit the Philippines in a span of
just four weeks, including Vamco and Super Typhoon Goni, the
world's most powerful this year, causing massive flooding and
crop damage. "The central bank will likely pause at its December meeting,
now that real policy rates have fallen even deeper into negative
territory," said ING economist Nicholas Mapa.
Further rate cuts could be expected next year, said Alex
Holmes, economist at Capital Economics, who predicted a 9.5%
economic contraction this year, worse than the 6.9% downturn
projected by the World Bank, the biggest slump since the 1980s.
Despite further easing, inflation is not a concern for the
central bank, saying expectations are firmly anchored within the
2%-4% target band for 2020 up to 2022.
The BSP revised its inflation forecasts to 2.4% for this
year, from 2.3% previously, and to 2.7% for next year, from
2.8%. Inflation in 2022 was projected at 2.9% versus 3%
previously.