BSP cuts interest rates again in December meeting

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) Monetary Board on Thursday, December 11, trimmed its interest rates by 25 basis points at its December meeting.

This marks the fifth consecutive rate cut this year, lowering the Target Reverse Repurchase (RRP) Rate to 4.50% from 4.75%, following a similar reduction in October.

With the latest move, the rates on the overnight deposit and lending facilities were also reduced to 4% and 5%, respectively.

According to the Monetary Board, the inflation outlook remains favorable, with price increase expectations well-contained, even as inflation forecasts for 2026 and 2027 slightly rise to 3.2% and 3.0%, respectively.

Conversely, the board noted a weakening outlook for domestic economic growth, citing the continued decline in overall business sentiment due to concerns over governance and ongoing global trade uncertainties.

"Nevertheless, domestic demand is expected to rebound slowly as the full impact of monetary policy easing works its way through the economy and as the pace and quality of public spending improves," the BSP's statement read. 

End of easing cycles. The Monetary Board also said that the easing cycle of the monetary policy "nears its end."

"Any additional easing will likely be limited and will be guided by incoming data," the BSP's statement read.

"Looking ahead, the BSP will ensure that overall policy settings remain consistent with maintaining price stability conducive to sustainable economic growth," it added.

On October 9, the BSP Monetary Board cut its benchmark interest rate by another 25 basis points, marking the fifth consecutive rate reduction since April.