'Growth slowdown only temporary'

The Bangko Sentral ng Pilipinas (BSP) expects the ongoing economic slowdown to last only two to three quarters, saying continued policy easing will help offset the drag from weaker business sentiment due to governance concerns surrounding public infrastructure projects.

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Speaking in an interview on “Money Talks,” BSP Governor Eli Remolona Jr. said central bank projections point to a slower growth in the near term, followed by a strong rebound starting in late 2026.

“Once we factored in negative business sentiment, we found that growth would slow down in 2026, but recover and more than catch up in 2027,” Remolona said.

“Inflation as well would be lower than we thought in 2026 and 2027. So that gave us more room to cut,” the BSP chief added.

The Monetary Board on Thursday surprised markets by slashing its benchmark rate by another 25 basis points to 4.75 percent, marking its fourth straight rate cut this year. This brought the cumulative rate cuts to 175 basis points since August 2024.

According to the governor, the Monetary Board’s decision was “overwhelmingly in favor of a cut,” amid growth concerns.