BSP cuts policy rate by 25 bps amid benign inflation

The Bangko Sentral ng Pilipinas (BSP) has resumed its easing cycle by cutting its policy rate by 25 basis points to 5.5 percent, with the overnight deposit and lending facilities adjusted to 5 percent and 6 percent, respectively.

This decision was influenced by benign inflation rates, with headline inflation easing to 1.8 percent in March, the lowest in over three years.

BSP Governor Eli Remolona Jr. signaled that more 25 basis point cuts are definitely coming this year, supported by manageable inflation.

However, private-sector economists expect the central bank to slash the key interest rate by an additional three-quarter point by the end of 2025.

The BSP's rate cut is seen supporting Philippine growth amid global headwinds such as the United States' tariffs, which the central bank said could slow global gross domestic product (GDP) growth and pose risks to the local economy.