At its monetary policy meeting today, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided to reduce the Target Reverse Repurchase (RRP) Rate by 25 basis points, bringing it down to 4.25 percent.
This strategic move reflects the BSP’s commitment to maintaining price stability while fostering a conducive environment for sustainable economic growth. The adjustment comes amid evolving domestic and global economic conditions, signalling a shift toward a more accommodative policy stance.
Following the decision on the RRP rate, the interest rates on the BSP’s standing facilities have been adjusted accordingly:
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Overnight Deposit Facility: Adjusted to 3.75 percent.
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Overnight Lending Facility: Adjusted to 4.75 percent.
The Monetary Board’s decision was informed by several critical factors:
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Manageable Inflation Outlook: Latest baseline forecasts suggest that inflation is likely to remain within the government’s target range over the policy horizon.
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Global Headwinds: The Board noted a softening in global economic activity and shifting central bank policies worldwide, necessitating a proactive response to shield domestic momentum.
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Supporting Domestic Demand: By lowering borrowing costs, the BSP aims to support credit activity and consumption, ensuring that the Philippine economy remains resilient in the face of external uncertainties. “The Monetary Board remains vigilant of emerging risks to the inflation outlook and growth trajectory,” stated the BSP. “We stand ready to adjust our policy settings as necessary to ensure that monetary policy continues to support the Bangko Sentral’s primary mandate of price stability.”
Moving forward, the BSP will continue to monitor high-frequency data, including global commodity prices and domestic demand indicators, to ensure that the monetary policy stance remains appropriate for the prevailing economic landscape.
