Economists expect BSP rate pause

hile private- sector economists anticipate one last monetary policy easing before 2025 comes to a close, in order to safeguard economic growth next year, they do not think the Bangko Sentral ng Pilipinas (BSP) will reduce the key borrowing costs on Thursday, Oct. 9.

- DERCO ROSAL

Singapore-based United Overseas Bank (UOB) said the price pressures and the underperforming gross domestic product (GDP) growth reinforce a need for another adjustment in the lending rate, but it does not see it as ideal this week.

“External headwinds continue to pose downside risks to the nation’s economic growth heading into 2026,” UOB Global Economics & Markets Research said in an Oct. 3 commentary. It also expects consumer price hikes to move faster in the coming months, but at a rate that remains within the central bank’s medium-term target of two to four percent.

UOB economist Jasrine Loke noted that this backdrop “reinforces the case for one final 25-bp [basis point] rate cut in the fourth quarter of 2025 to 4.75 percent to further safeguard the country’s growth momentum in 2026.”

To date, the policy-setting Monetary Board (MB) has reduced the key lending rate by 150 basis points to five percent from 6.5 percent, following the easing cycle that began in August last year.