The Monetary Board, the policy-making arm of the Bangko Sentral ng Pilipinas (BSP), reduced the policy rate by another 25 basis points on decelerating inflation.
The new interest rate cut translates to Reverse Repurchase (RRP) Rate to 5.50 percent, the BSP said on April 10, 2025.
The interest rates on the overnight deposit and lending facilities were accordingly adjusted to 5.0 percent and 6.0 percent, respectively.
The latest inflation forecasts have declined from the forecasts of the February policy meeting. The risk-adjusted inflation forecast for 2025 fell from 3.5 percent to 2.3 percent, while the forecast for 2026 declined from 3.7 percent to 3.3 percent. Meanwhile, the risk-adjusted inflation forecast for 2027 stands at 3.2 percent. Inflation expectations also remain within target.
The risks to the inflation outlook have also eased and continue to be broadly balanced from 2025 to 2027. Upside pressures come from possible increases in transport charges, meat prices, and utility rates. Meanwhile, downside risks are linked to the continuing effects of lower tariffs on rice imports and the expected impact of weaker global demand.
The Monetary Board noted the more challenging external environment, which would dampen global GDP growth and pose a downside risk to domestic economic activity.
On balance, the more manageable inflation outlook and the risks to growth allow for a shift toward a more accommodative monetary policy stance.
Looking ahead, the BSP will continue to take a measured approach in deciding on further monetary easing. The BSP will remain data-dependent in its pursuit of price stability conducive to sustainable economic growth and employment.
