Archive

December 11, 2025
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BSP Cuts Near Endpoint Amid Structural Headwinds

  • The BSP unsurprisingly cut rates by 25bps to 4.50% and signalled the cycle as near its end despite weakness; this matched the consensus but marks the fifth consecutive cut with 200bps total easing since August 2024.
  • Growth decelerated to a three-year low of 4.0% in Q3 amid governance concerns and trade policy uncertainty. Recovery is dependent on improved fiscal spending and confidence restoration.
  • Inflation forecasts are revised upward to 3.2% (2026) and 3.0% (2027), approaching the upper target band. Further easing is "likely limited" pending data showing effective transmission.
October 09, 2025
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BSP Delivers Unexpected Policy Easing

  • BSP cut rates 25bp to 4.75% surprising market expectations for a pause, citing a weakened growth outlook from infrastructure governance concerns.
  • Benign inflation at 1.7%, well below the 2-4% target, provides scope for accommodation despite electricity and rice tariff upside risks.
  • Further easing is likely in December as BSP signals the policy "sweet spot" is lower than expected amid persistent growth headwinds.
August 28, 2025
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BSP Cuts to 5% in "Goldilocks" Zone

  • BSP cut rates by 25bp to 5.0%, meeting consensus expectations and bringing total easing to 150bp since the cycle began one year ago.
  • A further 25bp cut is likely by December, targeting a terminal rate of 4.75% as inflation remains well below the 2-4% target range.
  • US tariff uncertainty weighs on outlook, but the BSP signals a slightly less dovish stance as policy approaches a "Goldilocks zone" sweet spot.
June 19, 2025
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Philippines: 25bp Rate Cut to 5.25% (Consensus 5.25%) in Jun-25

  • The Bangko Sentral Ng Pilipinas (BSP) reduced its Target RRP Rate by 25 basis points to 5.25%, a move that aligned with consensus forecasts and was prompted by a sharply lower inflation outlook for 2025.
  • The decision reflects growing concerns over a global economic slowdown, persistent US trade policy uncertainty, and a widening domestic output gap, all of which argue for a more accommodative monetary stance.
  • Future rate decisions will hinge on inflation dynamics, external policy shifts—especially from the US Federal Reserve—and the effectiveness of monetary easing in supporting domestic growth without compromising price stability

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