BSP cuts policy rate, signals easing cycle nearing an end

December 11, 2025 – 6:21 PM

Facade of the Bangko Sentral ng Pilipinas in Manila. (BSP/Released)

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Central bank cuts rates for fifth straight time

Reduction brings policy rate to three-year low of 4.5%

BSP nearing end of easing cycle, further easing limited

The Philippine central bank cut its benchmark policy rate for the fifth straight meeting on Thursday to bolster growth, signalling its easing cycle is nearing an end, with any further moves to be limited and dependent on data.

The Bangko Sentral ng Pilipinas lowered its benchmark rate

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by 25 basis points to a three-year low of 4.5%, in line with expectations from all but one of 27 economists in a Reuters poll.

The rate cut, which had been flagged by central bank Governor Eli Remolona, comes as a corruption scandal tied to infrastructure projects clouds the Southeast Asian country’s growth outlook.

The controversy has implicated public works officials, senators, and congressmen, sparking nationwide protests and constraining infrastructure spending.

He added the move would not address the scandal but it could “compensate” for its impact on investor sentiment.

Remolona said that growth concerns now outweigh price risks, with inflation subdued.

Inflation has averaged 1.6% in 2025, below the central bank’s 2%-4% target range for the year. It is forecast to reach 3.2% in 2026 before easing to 3.0% in 2027.

“The economy is certainly in need of some support,” Capital Economics said in a research note. “We are still expecting two further 25 bps cuts” for 2026, it said.

The central bank has eased rates by a cumulative 200 basis points in its current cycle, with Remolona expressing confidence that the accommodative policy stance will support economic recovery next year.

—Reporting by Karen Lema and Mikhail Flores; Editing by John Mair and Jacqueline Wong