BSP cuts interest rates to 5% again in August
MANILA, Philippines — The Bangko Sentral ng Pilipinas’ Monetary Board once again trimmed its interest rates by another 25 basis points, it said on Thursday, August 28.
This marks the third consecutive cut by the monetary board since its April meeting, cooling the target repurchase rate to 5%, down from 5.25% last June.
Following the adjustment, the overnight deposit and lending facility rates have been revised to 4.5% and 5.5%, respectively.
The central bank also said that the inflation outlook is expected to remain largely unchanged, noting that inflation expectations are well anchored.
The inflation forecast for 2025 has been set at 1.7%, while projections for 2026 and 2027 are 3.3% and 3.4%, respectively.
Despite the cooldown, the central bank noted that possible electricity rate adjustments and higher rice tariffs could raise inflationary pressures.
The central bank also observed that while domestic demand has remained firm, the global economic outlook is tempered by the impact of US policies on trade and investment.
“Going forward, the BSP will safeguard price stability by ensuring monetary policy settings are conducive to sustainable economic growth and employment,” the central bank said in a statement.
In July, energy and food prices prompted inflation to cool by 0.9% — the lowest recorded headline inflation since October 2019.
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