Manila: The Bangko Sentral ng Pilipinas (BSP) has announced a reduction of 25 basis points in its target reverse repurchase (RRP) rate, bringing it down to 4.50 percent. This marks the eighth rate cut this year as the central bank continues to manage inflation levels.

According to Philippines News Agency, BSP Governor Eli Remolona indicated during a briefing that this cut might signify the conclusion of the current easing cycle, although future decisions will depend on upcoming data. Remolona noted that while the recent cut aims to stimulate economic activity, it comes at a time when governance issues have impacted infrastructure investments, government spending, and domestic demand.

The Monetary Board (MB) has adjusted the BSP’s inflation outlook for the current year to 1.6 percent, a slight drop from the previous 1.7 percent. However, projections for 2026 and 2027 have been revised upward to 3.2 percent and 3 percent, respectively. Despite these changes, Remolona assured that inflation expectations remain stable.

Remolona also stated that domestic demand is anticipated to recover gradually as the effects of monetary policy easing permeate the economy. This recovery is expected even amid global trade concerns and challenges related to government flood control projects. The BSP remains committed to maintaining policy settings that support price stability and sustainable economic growth.

Economic growth for next year is projected at around 5.3 percent. Remolona is optimistic about a recovery in the latter half of the year, contingent upon the government’s efforts to address governance issues. He expressed hope for a return to target growth levels by 2027.