The Bangko Sentral ng Pilipinas (BSP) opted to maintain its benchmark interest rate at 5.75% during its latest monetary policy meeting, keeping the overnight deposit and lending rates steady at 5.25% and 6.25%, respectively.
The BSP’s latest inflation projections remain largely in line with previous estimates. However, the risk-adjusted inflation forecast for 2025 has inched up to 3.5% from 3.4%, while the forecast for 2026 remains unchanged at 3.7%. Despite these adjustments, inflation expectations remain within the BSP’s target range.
The Monetary Board noted that inflation risks for the next two years have become more balanced. On the upside, potential price increases in the utilities sector pose a challenge, while the recent reduction in rice import tariffs is expected to exert downward pressure on inflation.
Economic outlook and policy considerations
While the domestic economy remains resilient, the board acknowledged rising uncertainties in the global economic landscape, which could impact local growth. Given this backdrop, policymakers decided to keep interest rates unchanged to allow more time to assess how global economic trends and previous rate adjustments influence inflation and economic activity.
The BSP signaled a gradual shift toward a more accommodative monetary policy in the future but emphasized a data-driven approach. Any changes in interest rates will be carefully considered based on evolving inflation and growth conditions.
Moving forward, the central bank remains committed to maintaining price stability while supporting sustainable economic growth and employment.
