Benise Balaoing

The facade of the Bangko Sentral ng Pilipinas on February 15, 2024. Jonathan Cellona, ABS-CBN News

Article (news)

Bangko Sentral ng Pilipinas

ABS-CBN News

MANILA — The Bangko Sentral ng Pilipinas (BSP) has reduced its benchmark rate further by 25 basis points, as inflation slowed to less than 1 percent in July.The BSP lowered its target overnight reverse repurchase rate to 5 percent from 5.25 percent in its previous rate-setting meeting in June.<div><a href="https://www.abs-cbn.com/news/business/2025/6/19/bangko-sentral-cuts-benchmark-rate-by-25-basis-points-1509" rel="noopener noreferrer" target="_blank">Bangko Sentral cuts benchmark rate by 25 basis points</a></div>“I think this puts us at our sweet sweet spot for both inflation and output,” Remolona said of the rate cut. “The policy rate itself is at our Goldilocks rate, neither too high nor too low,” he said.The Central Bank said the inflation outlook was broadly unchanged, with the full-year inflation forecast expected to be at 1.7 percent. BSP noted, however, that power rate adjustments and higher rice tariffs could drive prices upward.Remolona added that food prices may drive inflation upward.But he noted that inflation was likely to remain within the 2 to 4 percent target band even if these risks materialized.Asked how much policy space the BSP has for further easing should inflation remain low, Remolona said, “I think we have space for one more cut. If the data develops the way we think it will develop, then maybe one more cut this year.”The governor clarified that another rate cut was only a possibility.“We&#x27;re not saying it&#x27;s likely,” he said.The central bank chief said weaker output might push them to further slash interest rates.“We do surveys and…they tell us whether they expect to build up inventories to buy more things. So these are businesses, and that data looks like, output will be weaker than before,” he said.BSP said its monetary board noted that domestic demand remained steady, but US trade policies could still dampen global economic growth.The central bank said it expected inflation to pick up to 3.3 percent in 2026 and 3.4 percent in 2027.“The uncertainty and also the slowdown, possible slowdown in global growth has reduced demand pressures, and this has contributed to the benign conditions that we are seeing right now in terms of overall inflation,” said Deputy Governor Zeno Abenoja.“So that has been taken into account in the path that we have just described, benign inflation this year, within inflation target for the next two years,” he said.

BSP cuts policy rate by 25 basis points to 5 pct

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BSP cuts policy rate by 25 basis points to 5 pct

Benise Balaoing,

ABS-CBN News

Published Aug 28, 2025 02:42 PM PHT

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Updated Aug 28, 2025 05:38 PM PHT

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