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BSP: Slow growth raises rate cut odds
Business World Philippines
|December 04, 2025
THE PHILIPPINE ECONOMY will likely undershoot the target this year amid spending cuts and weak investor sentiment due to the graft scandal, increasing the possibility of further easing this month, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said.
Speaking to reporters at the BSP head office in Manila, Mr. Remolona said gross domestic product (GDP) growth could settle between 4% and 5% by yearend, well-below the government’s 5.5-6.5% goal.
Asked if this raises the odds of a rate cut at its Dec. 11 meeting, Mr. Remolona said: “Yeah, most definitely. But it’s not assured.”
The BSP in October reduced the benchmark interest rate by 25 basis points (bps) for a fourth time in a row, bringing borrowing costs to an over three-year low of 4.75%. It has so far delivered a total of 175 bps in cuts since it began its easing cycle in August 2024.
The Philippine economic outlook has been clouded by a corruption scandal involving anomalous government projects. This has slowed government spending, hurt investor confidence, and dampened business and consumer sentiment.
Mr. Remolona said GDP growth is expected to slump this year with a slight pickup by mid next year. A full recovery is likely by 2027, he added.
“One reason is part of the decline in 2025 is because the government also cut its spending in order to review flood control projects and other projects. But the main reason is probably the loss of confidence by investors,” Mr. Remolona said.
Earlier this week, Economy Secretary Arsenio M. Balisacan conceded that this year’s growth target is out of reach, after a weaker-than-expected third-quarter growth.
In the third quarter, the Philippine economy grew by 4%, the slowest in over four years. This brought the nine-month GDP growth average to 5%.
Dit verhaal komt uit de December 04, 2025-editie van Business World Philippines.
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