BSP cuts rates anew

Signals easing cycle ‘nearing its end'

- By KEISHA TA-ASAN

The Bangko Sentral ng Pilipinas (BSP) further trimmed its benchmark interest rate by 25 basis points yesterday as policymakers cited a benign inflation outlook and weaker domestic demand, while signaling that the current monetary easing cycle may soon end.

In its last policy meeting for the year, the BSP's Monetary Board lowered the target reverse repurchase rate to 4.50 percent. Rates on the overnight deposit and lending facilities were likewise cut to four percent and five percent, respectively.

With the latest move, the BSP has so far reduced borrowing costs by 200 basis points since it began its easing in August last year.

"The outlook for inflation continues to be benign and inflation expectations remain firmly anchored," the board said in a statement.

During the post-meeting briefing, BSP Governor Eli Remolona Jr. said the central bank continues to expect inflation to fall below the two to four percent target this year, but it should be back to target in 2026 and 2027.

However, business sentiment "has continued to decline on concerns about governance issues and lingering uncertainty over global trade policy."