By the staff
The Bangko Sentral ng Pilipinas is reworking its growth outlook after the economy slowed more sharply than expected in late 2025, Governor Eli Remolona Jr. said.
GDP grew just 3% in the fourth quarter, the weakest pace since 2011 outside the pandemic, dragging full‑year growth to 4.4%. “We thought fourth‑quarter growth would come in at around 3.8%,” Remolona said. “This one is even worse than that. We kind of made a mistake there.”
Remolona said the central bank expects growth “to recover by the second half of 2026” but left the door open to policy easing. “There can be another rate cut, but we’ll see. If we can help on the demand side and still keep inflation low, then of course we’ll help,” he said.
Global banks see the weak print as a trigger for cuts. Deutsche Bank said GDP came in well below its 4.1% forecast and a 3.7% consensus, adding: “We think that a February rate cut from the BSP is now almost certainly on the table.”
Citigroup cited weak public investment, saying: “The sharp growth slowdown increases our conviction for a 25 basis point rate cut in the Feb. 19 meeting.”
Citi projects growth stabilizing at 3.5%–4% in the first half of 2026 before climbing toward 5% by year‑end, with full‑year growth at 4.5%.
Both banks warned BSP’s next moves will hinge on inflation, oil prices and government spending.
