By the staff
The Bangko Sentral ng Pilipinas (BSP) is close to ending its monetary easing cycle, with inflation subdued but growth prospects weakening.
“On balance, the Monetary Board views the monetary policy easing cycle as nearing its end,” the BSP said, noting any further cuts would be “limited and guided by incoming data.”
Inflation was 1.8% in December, pulling the 2025 average to 1.7%, below the 2–4% target. The BSP said the outlook “remains benign” and expectations are “well anchored.”
Governor Eli Remolona Jr. called December’s figure “a reasonably low inflation rate” but acknowledged growth “has weakened further.”
He said demand should recover “as the effects of monetary policy easing works its way through the economy and public spending improves.”
Remolona said growth is projected at 4.6% in 2025, 5.4% in 2026 and 6% in 2027.
On policy, he added: “There’s a chance that we may cut some more. But there’s also a chance that we may not move at all. It’s almost unthinkable to raise the policy rate at this point.”
He said the likely scenarios are “either no cut or one more time,” adding that two cuts would mean “things are worse than we thought. That would require a bad surprise in the data.”
The BSP last lowered its key rate by 25 basis points to 4.50% in December, bringing total reductions since August 2024 to 200 basis points.
