The Bangko Sentral ng Pilipinas (Bangko Sentral ng Pilipinas) said inflation remains firmly under control, reinforcing expectations that the country’s monetary policy easing cycle is approaching its final stretch.
In a statement on the medium-term inflation path, the central bank reported that January 2026 inflation came in at 2 percent, squarely within its forecast range of 1.4 to 2.2 percent.
The BSP described the inflation outlook as benign, noting that price expectations remain well anchored despite global uncertainties. Looking ahead, inflation is projected to settle within the official target of 3.0 percent, plus or minus one percentage point, in both 2026 and 2027.
While price pressures appear manageable, the Monetary Board acknowledged growing softness in domestic economic conditions. According to the BSP, business sentiment has continued to weaken, weighed down by governance concerns and uncertainty surrounding global trade policies.
These factors have dampened near-term confidence and investment appetite, contributing to a more cautious economic outlook.
Still, policymakers see signs of gradual recovery ahead. The BSP expects domestic demand to pick up as the effects of earlier monetary policy easing filter through the economy, complemented by improved public spending. These factors are seen as providing support to growth even as external risks persist.
On balance, the Monetary Board said the current easing cycle is likely nearing its end. Any further policy rate cuts, if warranted, are expected to be limited and strictly guided by incoming economic data.
The BSP emphasized that future decisions will remain data-dependent, with careful attention to both inflation dynamics and growth risks.
The Monetary Board is scheduled to meet on February 19, 2026, where it will reassess the country’s macroeconomic prospects and their implications for monetary policy, a meeting closely watched by markets for signals on the next phase of the central bank’s policy stance.
