Benise Balaoing

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

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Bangko Sentral

ABS-CBN News

MANILA -- The Bangko Sentral ng Pilipinas (BSP) cut its benchmark rate by another 25 basis points on Thursday.The BSP’s target reverse repurchase rate, which banks use to price loans, is now at 4.25 percent.Benign <a href="http://Inflation quickens to 2 percent in January">inflation</a> has allowed the BSP to ease monetary policy to support the country’s growth, which was less than expected in 2025.The Bangko Sentral said the inflation outlook remains manageable. It noted, however, that inflation may go up because of supply-side pressures.BSP Deputy Governor Xeno Abenoja said the central bank sees inflation hitting 3.6 percent in 2026, then easing to 3.2 percent in 2027.Abenoja said higher electricity prices may drive up inflation.“We also anticipate the impact of the flexible rice tariff mechanism on domestic rice prices, oil prices are also higher if we go by what is seen in the futures prices,” he said.Central Bank Governor Eli Remolona noted that economic growth has been softer than expected as investment slowed.“We attribute this to a lack of confidence,” Remolona said, “But soft data on sentiment show tentative signs of recovery. Our decision today may actually help to restore confidence, boosting in investment and consumption.”“The pace of economic recovery will depend on how quickly confidence returns,” he said.Remolona said the improvement of investor confidence is the “single biggest factor” that would guide its decision on future rate cuts.“In December, we were more confident that confidence will return pretty soon,” Remolona said. “But…the lack of confidence actually turned out to be bigger than we thought.”“To be honest, we underestimated the impact of confidence our growth rates. We&#x27;ve calibrated our models so that they give more weight to the role of confidence [than] we thought,” he said.“We didn&#x27;t think the (fourth quarter) number would be so low, and that told us that actually confidence plays a bigger role than we thought when we when the flood control scandal broke out.”The Philippines economy grew at its slowest non-pandemic pace in 14 years in 2025, as it was swiped by a corruption scandal and climate change-fuelled weather woes.<div> </div><div><a href="https://www.abs-cbn.com/news/business/2026/1/29/philippines-gdp-fourth-quarter-2025-below-target-1012">Philippines posts worst economic growth since 2011</a></div>

The Bangko Sentral ng Pilipinas cut its benchmark rate by another 25 basis points.

The Bangko Sentral ng Pilipinas cut its benchmark rate by another 25 basis points.

BSP cuts benchmark rate by another 25 basis points to 4.25 pct

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BSP cuts benchmark rate by another 25 basis points to 4.25 pct

Benise Balaoing,

ABS-CBN News

Published February 19, 2026 02:46 PM PHT

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Updated February 19, 2026 05:30 PM PHT

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