Philippines cuts policy rate by 25 bps as inflation outlook eases

The Bangko Sentral ng Pilipinas (BSP) has reduced its key policy rate by 25 basis points to 5.25 per cent during its monetary policy meeting, citing a more moderate inflation outlook. Corresponding rates for the overnight deposit and lending facilities were also adjusted to 4.75 per cent and 5.75 per cent, respectively.

The central bank noted that inflation forecasts for 2025 have been revised downward from 2.4 per cent to 1.6 per cent, while projections for 2026 and 2027 were slightly adjusted upward to 3.4 per cent and 3.3 per cent, respectively. Despite emerging inflationary pressures from potential hikes in oil prices and electricity rates inflation expectations remain firmly anchored, BSP said in a release.

The Monetary Board highlighted signs of a global economic slowdown, driven by uncertainties in US trade policy and tensions in the Middle East, as key reasons for its more accommodative stance.

The BSP reaffirmed its commitment to safeguarding price stability while ensuring monetary settings remain supportive of sustained growth and employment. It will continue to closely monitor geopolitical risks and the effects of previous rate actions.

ALCHEMPro News Desk (HU)