The Bangko Sentral ng Pilipinas (BSP) is expected to cut key rates again in December and further in 2026, following last week’s 25-basis-point reduction aimed at supporting domestic growth, according to BMI Country Risk & Industry Research.
The BSP lowered its reverse repurchase (RRP) rate to 4.75 percent on Oct. 9, marking a total 175-basis-point reduction since 2024, including 100 basis points in the first nine months of 2025.
“We maintain our forecast of 50 bps (basis points) in cuts in 2026 with inflation remaining soft,” the research unit of Fitch Group said in a report Monday.
Lower rates reduce borrowing costs, encouraging lending and boosting economic activity. Inflation rose to 1.7 percent in September from 1.5 percent in August due to weather-related food disruptions, while the average for the first nine months remained below the BSP’s 2–4 percent target.
BMI cited a “more dovish tone” following the rate cut, noting BSP Governor Eli Remolona’s comments on the “scope for a more accommodative monetary policy stance” and the “favorable inflation outlook and moderating domestic demand.”
“As such, we now expect BSP to cut by 25bps at its final meeting in 2025 in December to 4.50 percent and by another 50 bps in 2026,” the report added.
BMI forecasts 5.4 percent domestic growth for 2025, slightly below the government’s 5.5–6.5 percent target, while highlighting risks including a decline in the Philippine Stock Exchange index, slower merchandise exports, and volatility tied to flood control project investigations.
Exports rose 4.6 percent in August from 17.6 percent in July, partly reflecting U.S. tariff impacts.
