S&P: Measured rate cuts ahead for central bank

Central banks in emerging markets, including the Bangko Sentral ng Pilipinas (BSP), will likely take a measured approach to monetary policy next year as global trade dynamics shift, according to S&P Global Ratings.

- By DERCO ROSAL

The credit grader said in a Dec. 17 report that its outlook for emerging market policy rates remains unchanged despite the United States (US) Federal Reserve’s decision this month to lower borrowing costs.

The Fed last week reduced its key interest rate by 25 basis points to a range of 3.5 percent to 3.75 percent to support employment and stabilize inflation at its two percent target.

In Manila, the BSP followed suit with its fifth rate cut of the year, lowering the benchmark rate to 4.5 percent from 4.75 percent. The move follows a sharp slowdown in the Philippine economy, which saw growth slump to four percent in the third quarter.

The country’s economy, as measured by the gross domestic product (GDP), expanded by an average of five percent over the first nine months of 2025, hampered in part by concerns over flood-control governance.