BSP implements first rate cut of 2026
MANILA, Philippines — The Bangko Sentral Pilipinas’ (BSP) Monetary Board has once again trimmed its key interest rates by 25 basis points.
This brings the reverse repurchase target rate to 4.25% on Thursday, February 19, down from 4.50% at its December 2025 meeting.
With this adjustment, the interest rates for overnight deposit and lending facilities have been adjusted to 3.75% and 4.75%, respectively.
This pivot in monetary policy comes in response to recent economic data showing that domestic growth has fallen short of the central bank's initial expectations.
According to the BSP, softened domestic demand has weighed heavily on the nation's performance.
While the BSP anticipates a recovery in the second half of the year, it pointed out that the speed of this rebound hinges primarily on the restoration of market confidence.
“The Monetary Board will continue to be vigilant and guided by incoming information, specifically data on inflation. The BSP will ensure that overall policy settings remain in line with our pursuit of price stability conducive to sustainable growth and employment,” the BSP’s statement read.
Meanwhile, the BSP said it maintains that the overall outlook remains manageable.
Although 2026 forecasts have been nudged slightly higher due to supply-side pressures, the central bank views these factors as transitory.
“Long-term inflation expectations remain firmly anchored, with the bank projecting a return to the 3 percent target by 2027,” the BSP’s statement read.
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