Bangko Sentral Pilipinas (BSP) had adopted a rigorous rate hike cycle last year, between May and November, totalling 175 basis points in a bid to cool inflation rates that had reached a near-decade peak.
"It (inflation forecast cut) is more of an indirect signal that BSP is ready to do some easing of monetary policy soon," said Rachelle C Cruz, an analyst with AP Securities.
The Philippine benchmark stock index closed higher for a third session in a row and posted its highest weekly gain in 11 weeks.
Shares of Universal Robina Corp gained 2.9 percent, while International Container Terminal Services Inc rose 2.3 percent.
Thai stocks rose 0.8 percent to a three-week closing peak, buoyed by market heavyweights Siam Commercial Bank Pcl (SCB) and PTT Exploration and Production Pcl.
Shares of Siam Commercial Bank closed 3.1 percent higher after the company said it had entered into exclusive talks with Hong Kong-based insurer FWD Group for the sale of its life insurance business, nearly two years after previous talks broke off.
Shares of PTTEP ended 2 percent higher after the company bought oil and gas assets in Malaysia for $2.13 billion from Murphy Oil Corp.
For the week, Thai shares gained 1.3 percent, snapping three weekly falls.
Real estate stocks helped Vietnam snap three straight sessions of losses. Vinhomes JSC and Vingroup JSC rose 3.3 percent and 1.4 percent, respectively.
Malaysian stocks closed higher for the first time in four sessions with telecom stocks leading the recovery, but lost 0.8 percent for the week.
(Reporting by Shreya Mariam Job in Bengaluru; Editing by Subhranshu Sahu)
By Shreya Mariam Job