BSP rate cut to boost holiday spending, consumer borrowing

The Bangko Sentral ng Pilipinas (BSP)'s recent interest rate cut is anticipated to stimulate consumer borrowing and spending during the upcoming year-end holidays, according to TransUnion Philippines.

This strategic rate reduction by the BSP aligns with the BER months, a period characterized by increased retail activity and remittances, which typically leads to a surge in household consumption.

Lower borrowing costs are expected to enhance consumer appetite for credit products like credit cards, personal loans, and buy now, pay later options.

The BSP's decision to reduce its benchmark rate by 25 basis points to 4.75 percent is the fourth consecutive cut this year, aiming to bolster domestic demand amidst indications of declining business confidence.