Insider Spotlight
Driving the news
At its meeting on Aug. 28, the Monetary Board lowered the Target Reverse Repurchase (RRP) Rate by a quarter point.
Corresponding rates on overnight deposit and lending facilities were set at 4.5 percent and 5.5 percent.
In a statement on Thursday, the central bank said the adjustment comes against a backdrop of broadly unchanged inflation outlook.
The BSP’s forecast for 2025 inflation settled at 1.7 percent, with projections of 3.3 percent in 2026 and 3.4 percent in 2027.
Why it matters
While inflation is anchored, the BSP flagged risks that could push prices higher, including potential electricity rate adjustments and higher rice tariffs.
The Monetary Board also warned that U.S. policy decisions on trade and investment continue to weigh on global activity, a factor that could temper Philippine growth prospects.
What they’re saying
“The outlook for inflation is broadly unchanged. The inflation forecast for 2025 settled at 1.7 percent,” the BSP statement said. “Meanwhile, possible electricity rate adjustments and higher rice tariffs could raise inflationary pressures over the policy horizon.”
The big picture
Domestic demand has held firm, the BSP noted, but emerging global risks require “close monitoring.”
The central bank emphasized its priority of safeguarding price stability while keeping monetary conditions conducive to long-term growth and employment.
