In a press briefing, BSP Govenor Eli Remolona Jr. said the Monetary Board reduced the central bank's target reverse repurchase rate by 25 basis points, bringing it down to 6.25%.
This adjustment is part of a broader monetary policy shift aimed at supporting the country's economic growth.
Remolona emphasized that the decision was driven by a favorable inflation outlook, with headline inflation expected to fall within the government's 2-4% target range.
Despite a slight uptick in July, the inflation forecast for 2024 and 2025 stands at 3.3% and 2.9%, respectively, he said.
The BSP chief also highlighted the continued strength of domestic demand and solid economic growth in the second quarter, supported by robust employment and public investment.
Remolona said that, while some risks such as potential increases in electricity rates and external factors remain, the Monetary Board believes that easing price pressures and strong economic conditions warrant a shift towards a less restrictive monetary policy stance.
He added that the BSP will continue to monitor economic developments closely, ensuring that price stability is maintained to foster sustainable growth and employment.
