BSP cuts key rate again by 25 basis points amid weak growth

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) trimmed its benchmark interest rate by another 25 basis points at its October meeting, marking its fourth straight cut this year as inflation remains subdued and economic growth shows signs of slowing.

The central bank announced Thursday that the Target Reverse Repurchase Rate, or RRP, was lowered to 4.75% from 5%, following a similar reduction in August.

With the latest move, the rates on the overnight deposit and lending facilities were also reduced to 4.25% and 5.25%, respectively.

Within target. The BSP said its decision reflects a “benign” inflation outlook that remains “well within the target range.” It noted that inflation expectations are “well-anchored,” despite potential upward risks from possible power rate adjustments and higher rice import tariffs.

The central bank added that these pressures are expected to ease in the months ahead, keeping overall inflation manageable.

Growth outlook weakens. The Monetary Board, however, said the outlook for domestic economic growth has softened. It cited weaker business confidence linked to governance concerns surrounding public infrastructure spending.

“Indications of moderating demand also reflect lingering uncertainty from the external environment,” the BSP said.

The statement added that as the effects of previous rate cuts continue to filter through the economy, the central bank “will remain attentive to emerging risks while maintaining price stability conducive to sustainable growth and employment.”