Photo courtesy of Bangko Sentral ng Pilipinas.
Economists expect the Bangko Sentral ng Pilipinas (BSP) to consider further interest rate reductions as economic growth shows signs of slowing.
Analysts said easing inflation gives the central bank flexibility to keep a growth-supportive policy stance.
UnionBank chief economist Ruben Carlo Asuncion said policy rates could gradually move closer to 4 percent by late 2026, with an initial cut possible early this year.
He said additional adjustments would depend on inflation staying manageable, steady expectations, and stable financial conditions.
Jonathan Ravelas of Reyes Tacandong & Co. said the BSP may deliver one or two cautious rate cuts in the first half of the year if price pressures remain muted.
The central bank trimmed its benchmark rate to 4.5 percent in December, bringing total reductions since August 2024 to two percentage points.
BSP Governor Eli Remolona Jr. has said any further easing would likely be limited, noting that the current rate-cut cycle is nearing completion.