Kuala Lumpur, August 28, 2025 — The Bangko Sentral ng Pilipinas (BSP) announced today its third consecutive rate cut, lowering the benchmark reverse repurchase (RRP) rate by 25 basis points to 5.0%. This monetary easing move comes amid inflation cooling to 0.9% in July, a near six-year low, and follows a brisk rebound in growth with Q2 GDP expanding at 5.5% year-on-year, marking the fastest pace in a year.
In its policy statement, the central bank described inflation projections as “broadly unchanged,” maintaining a forecast of 1.7% for 2025, followed by 3.3% in 2026 and 3.4% in 2027. However, officials flagged potential risks from rising electricity and rice prices, which could reignite inflationary pressures down the road. BSP reaffirmed its dual mandate to safeguard price stability while ensuring monetary settings remain conducive to sustainable economic growth and employment.
This move aligns with earlier expectations—economists across the board anticipated this cut, and many now foresee further easing before the year ends, potentially bringing the key rate to 4.75%. Powdered by persistent cost-of-living relief, the easing cycle appears firmly on track.
Underlying this monetary decision is a healthy economic backdrop. With inflation staying subdued through June and July—despite a modest uptick in June utilities—economic activity remained resilient. The BSP’s more aggressive stance has helped maintain its position among emerging Asia’s stronger performers this year.
