The Bangko Sentral ng Pilipinas (BSP) can ease monetary policy further as inflation remains subdued and growth risks weigh, according to the International Monetary Fund.
The IMF’s baseline projects “another 50-basis-point reduction in the policy rate” by early 2026, bringing real rates closer to the lower end of the natural rate.
“With headline inflation below the midpoint of the target band, expectations anchored and an emerging negative output gap, the projected accommodative stance is appropriate,” it said.
The fund urged BSP to stay data-driven, monitor liquidity, and maintain clear communication. Exchange rate flexibility should remain the first line of defense, while heavy forex intervention could undermine market development.
Philippine authorities agreed, noting a flexible, data-dependent approach amid weaker growth and low inflation.
