BSP cuts policy rate by 25 basis points to 4.50%

The Bangko Sentral ng Pilipinas (BSP) Monetary Board has reduced its benchmark policy rate by 25 basis points to 4.50%, marking the fifth consecutive rate cut this year.

This brings the target reverse repurchase rate to its lowest level in over three years, with the overnight deposit and lending facilities also reduced to 4% and 5%, respectively.

The BSP noted a weakening outlook for domestic economic growth due to concerns over governance and global trade uncertainties, which has also led to a decline in business sentiment.

However, domestic demand is expected to rebound slowly as the full impact of monetary policy easing works its way through the economy.

The BSP continues to expect inflation to fall below the two to four percent target this year, but should be back to target in 2026 and 2027.

BSP Governor Eli Remolona Jr. hinted that the current monetary policy easing cycle is nearing its end.