Insider Spotlight
📉 Policy adjustment
In a press briefing on Thursday, Oct. 9, 2025, BSP Governor Eli Remolona Jr. said the Monetary Board reduced its key interest rate — which guides borrowing and lending rates across the economy — by 25 basis points.
Corresponding adjustments were also made to the overnight deposit and lending rates to 4.25 percent and 5.25 percent, respectively.
The central bank chief cited a “benign” inflation outlook that remains well within its target range and said inflation expectations “remain well-anchored.”
With price pressures easing, policymakers saw room to support economic activity without threatening price stability.
📊 Weak growth outlook
The BSP noted that domestic growth prospects have softened, citing weaker business confidence linked to “governance concerns about public infrastructure spending” and signs of moderating demand amid external uncertainties.
“The outlook for domestic economic growth has weakened,” Remolona said, adding that a more accommodative stance is warranted given easing inflation and cooling demand.
💡 Policy context
Thursday’s rate cut marks the fourth straight reduction since the BSP began its monetary easing campaign to stimulate growth while maintaining price stability.
“On balance, the Monetary Board sees scope for a more accommodative monetary policy stance,” the BSP chief said. “The favorable inflation outlook and moderating domestic demand provide room to further support economic activity.”
The central bank said it will stay “attentive to emerging risks” and maintain conditions conducive to sustainable growth and employment.
⚠️ What’s next
While inflation remains subdued, the BSP warned that potential electricity rate hikes and higher rice import tariffs could introduce temporary upward price pressures. Nonetheless, the regulator expects inflation to remain within target as earlier rate cuts continue to work through the economy. —Daxim L. Lucas |Ed: Corrie S. Narisma
