The Monetary Board decided to reduce the BSP’s Target Reverse Repurchase (RRP) Rate by 25 basis points to 5.25 percent.

The interest rates on the overnight deposit and lending facilities were adjusted to 4.75 percent and 5.75 percent, respectively.

The Monetary Board took this action as the outlook for inflation moderated. The inflation forecast for 2025 fell from 2.4 percent to 1.6 percent.

Meanwhile, forecasts for 2026 rose marginally from 3.3 percent to 3.4 percent and for 2027 from 3.2 percent to 3.3 percent. Inflation expectations remained well anchored.

The Monetary Board also noted indications of a deceleration in global economic activity, driven primarily by uncertainty over US trade policy and the conflict in the Middle East.

This would lead to slower growth in the Philippines. A rise in oil prices, electricity rate adjustments, and higher rice tariffs, would add to inflationary pressures.

On balance, the Monetary Board sees the need for a more accommodative monetary policy stance. Emerging risks to inflation from rising geopolitical tensions and external policy uncertainty require closer monitoring.

The Monetary Board will also continue to assess the impact of prior monetary policy adjustments.

The BSP will safeguard price stability by ensuring monetary policy settings are conducive to sustainable economic growth and employment. Bangko Sentral ng Pilipinas