The Philippine central bank (BSP) lowered its key policy rate by 25 basis points to 5.0% on Thursday, marking its third straight rate cut this year. The decision was widely expected by markets.
The move came after fresh data showed inflation slowed to a near six-year low of 0.9% in July, while the economy expanded by 5.5% year-on-year in the second quarter, its fastest growth in a year.
A Reuters poll of 26 economists had unanimously forecast the Bangko Sentral ng Pilipinas would trim its Target Reverse Repurchase Rate (RRP) by 0.25 percentage points.
In its statement, the BSP said its inflation outlook remains “broadly unchanged,” with projections of 1.7% for 2025, 3.3% for 2026, and 3.4% for 2027. However, the central bank cautioned that potential increases in electricity and rice prices could push inflation higher. It also stressed the need to monitor emerging risks that could affect price stability.
“Looking ahead, the BSP will safeguard price stability by ensuring monetary policy supports sustainable economic growth and employment,” the central bank added.
