Philippine Central Bank Cuts Rate By 25 Bps

(RTTNews) - The Philippines' central bank unexpectedly reduced its key interest rates by 25 basis points on Thursday amid benign inflation and weakening growth outlook.

The Monetary Board decided to reduce the Bangko Sentral ng Pilipinas' target reverse repurchase rate by 25 basis points to 4.50 percent. The bank was expected to retain its rate at 4.75 percent.

Accordingly, the interest rates on the overnight deposit and lending facilities were adjusted to 4.00 percent and 5.00 percent, respectively.

The bank has lowered the key rates by 25 basis points each in April, June, August and October.

The board sees the monetary policy easing cycle nearing its end," the bank said in a statement. Any additional easing will likely be limited and will be guided by incoming data.

The inflation forecasts for next year and 2027 rose slightly to 3.2 percent and 3.0 percent, respectively.

The bank observed that outlook for domestic economic growth weakened further. However, domestic demand is expected to rebound slowly as the full impact of easing works its way through the economy and as the pace of public spending improves. ING economist Deepali Bhargava expects further policy easing in the first quarter of 2026 as growth underperforms.