Future rate moves hinge on confidence

Following the widely expected monetary policy easing to 4.25 percent, the Bangko Sentral ng Pilipinas (BSP) stands on uncertain ground regarding its future moves, as the central bank’s outlook for confidence recovery has turned murky.

- By DERCO ROSAL

BSP Governor Eli M. Remolona Jr. told a press briefing on Thursday, Feb. 19, after the first policy meeting in 2026 that the Monetary Board (MB), which he chairs, is now in a position where its next moves are “more conditional” on developments in business and consumer confidence and economic growth.

This latest policy reduction comes against the backdrop of price pressures that remain manageable and an economy undershooting the BSP’s assumptions. Gross domestic product (GDP) growth slowed to 4.4 percent in 2025, pulled down by a sharp slowdown to a three-percent expansion in the fourth quarter. It bears noting that Remolona had earlier signaled the easing cycle was nearing its end but has now become more cautious, citing uncertainty over when confidence will return.