BSP expected to continue monetary easing

The Bangko Sentral ng Pilipinas (BSP) is expected to extend its monetary easing cycle next year with another quarter-point rate cut likely in the first quarter of 2026, according to a report by Manila Times.

“We think there’s potentially another cut in the first quarter, which is good for the economy,” Bank of the Philippine Islands President and CEO Jose Teodoro Limcaoco told reporters on Wednesday.

“It shows that the BSP has been doing its job correctly, inflation is under control, and they’re now doing this to continue to stimulate the economy,” he added.

The central bank’s policymaking Monetary Board has cut key interest rates twice so far this year, by 25 basis points (bps) each time, in February and June. It is widely expected to order a further 25-bp cut today, which will bring the benchmark rate to 5.0 percent.

Most analysts expect a fourth cut to follow, either in October or December.

Below-target inflation, subdued growth

Consumer price growth slowed to 0.9 percent last month, well under the central bank’s 2.0- to 4.0-percent target, amid declining rice prices and transport costs.

Economic growth, meanwhile, edged up to 5.5 percent in the second quarter from 5.4 percent in the first three months of 2025, hitting the bottom end of the government’ downwardly-revised 5.5- to 6.0-percent goal for the year.

The expansion, however, was slower than the 6.5 percent seen a year earlier and was also lower than 2024’s full-year result of 5.7 percent.

During the last policy meeting in June when a 25-basis-point cut was announced, monetary authorities trimmed the inflation forecast for this year to 1.6 percent from 2.4 percent. Those for 2026 and 2027 were marginally raised to 3.4 percent and 3.3 percent, respectively, from 3.3 percent and 3.2 percent.

Decision announcement changes

The central bank on Wednesday also said it would begin implementing a new format for releasing monetary policy decisions to enhance transparency and improve public understanding of its policy actions.

Under the revised procedure, the central bank will first release its monetary policy stance statement at 2:30 p.m. through its official website and X account.

A press conference will then be held at 3 p.m., livestreamed via the BSP’s official Facebook page. The briefing will start with central bank Governor Eli Remolona Jr. explaining the decision, followed by a question-and-answer session with members of the media.

Prior to this, the BSP issued policy decisions alongside the press briefing.