The Bangko Sentral ng Pilipinas (BSP) eased monetary policy anew as it moved to support a cooling domestic economy, cutting its Target Reverse Repurchase (RRP) Rate by 25 basis points to 4.50 percent during its policy meeting today. Corresponding adjustments were also made to the overnight deposit and lending facilities, now set at 4.00 percent and 5.00 percent, respectively.
The decision comes as inflation remains well within target and price pressures continue to ease. While the BSP describes the outlook as benign and inflation expectations as firmly anchored, forecasts for 2026 and 2027 have inched up slightly to 3.2 percent and 3.0 percent—still comfortably aligned with the central bank’s target range. This provides policy space for the BSP to shift its focus toward addressing slowing momentum in the real economy.
The Monetary Board acknowledged that domestic growth prospects have weakened further, citing a continued decline in business confidence amid governance concerns and ongoing uncertainty in global trade policy. These headwinds, it said, have dampened investment sentiment and weighed on economic activity.
Despite the softer outlook, the BSP expects domestic demand to recover gradually. The central bank sees the full effect of cumulative rate cuts filtering in over the coming quarters, while improvements in the pace and quality of public spending should also help lift economic conditions.
Policymakers, however, signaled that the current easing cycle is approaching its conclusion. The Monetary Board indicated that any additional monetary accommodation will be modest and strictly data-dependent.
Looking ahead, the BSP affirmed its commitment to maintaining policy settings that safeguard price stability while providing adequate support for sustainable economic growth—a balancing act that has become increasingly critical in a global environment marked by uncertainty and uneven recovery.