BUSINESS
Advocates Philippines
BSP Cuts Key Rate As Growth Outlook Softens
Photo credit: BSP
The Bangko Sentral ng Pilipinas (BSP) moved to ease monetary policy once again, lowering its benchmark interest rate as the economy shows signs of losing momentum.
In its latest policy meeting, the Monetary Board approved a 25-basis-point cut to the Target Reverse Repurchase (RRP) Rate, bringing it down to 4.50%. Corresponding adjustments were also made: the overnight deposit rate is now 4.00%, while the lending facility rate stands at 5.00%.
According to the BSP, inflation remains manageable, with expectations staying firmly anchored. Forecasts for the next two years, however, have inched up slightly—3.2% in 2026 and 3.0% in 2027—but still fall within the central bank’s target range.
Despite stable price conditions, the BSP pointed out that the outlook for domestic growth has weakened further. Business sentiment continues to slip amid concerns over governance issues and ongoing global trade uncertainty. Even so, policymakers expect local demand to gradually recover as the effects of recent rate cuts filter through the economy and as improvements in public spending take hold.
With today’s adjustment, the Monetary Board signaled that the current easing cycle is approaching its final stretch. Any future rate cuts, it said, will be minimal and entirely dependent on fresh economic data.
Moving forward, the BSP affirmed its commitment to keeping monetary policy aligned with its core mission: maintaining price stability to support long-term, sustainable economic growth.
In its latest policy meeting, the Monetary Board approved a 25-basis-point cut to the Target Reverse Repurchase (RRP) Rate, bringing it down to 4.50%. Corresponding adjustments were also made: the overnight deposit rate is now 4.00%, while the lending facility rate stands at 5.00%.
According to the BSP, inflation remains manageable, with expectations staying firmly anchored. Forecasts for the next two years, however, have inched up slightly—3.2% in 2026 and 3.0% in 2027—but still fall within the central bank’s target range.
Despite stable price conditions, the BSP pointed out that the outlook for domestic growth has weakened further. Business sentiment continues to slip amid concerns over governance issues and ongoing global trade uncertainty. Even so, policymakers expect local demand to gradually recover as the effects of recent rate cuts filter through the economy and as improvements in public spending take hold.
With today’s adjustment, the Monetary Board signaled that the current easing cycle is approaching its final stretch. Any future rate cuts, it said, will be minimal and entirely dependent on fresh economic data.
Moving forward, the BSP affirmed its commitment to keeping monetary policy aligned with its core mission: maintaining price stability to support long-term, sustainable economic growth.
Dec 11, 2025
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