BSP signals pause for the rest of 2025

After a series of aggressive rate cuts since August last year, borrowing costs may be kept steady for the rest of 2025, according to Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.

- KEISHA TA-ASAN

In an interview with Bloomberg TV, Remolona said the central bank might have already reached its "Goldilocks rate" after reducing borrowing costs by a total of 150 basis points in just over a year.

"I think we've reached our sweet spot for inflation as well as for output growth. If the numbers stay the way they are, then we won't need another rate cut," Remolona said.

"But there are signs of weakness, for example the Purchasing Managers' Index," he added. "If that weakness materializes, then there's room for one more rate cut."

A Goldilocks interest rate refers to a level of interest rates that is "just right" for a stable and growing economy, meaning the rates are neither too high to choke growth nor too low to fuel inflation.

According to Remolona, the Goldilocks rate is roughly aligned with the economy's trend growth and could change if demand falters.