BSP Cuts Key Interest Rates by 25 Basis Points, Hints at Further Easing in December

facility rate to 6.5%, effective October 17. This marks the second rate cut in 2024, following the BSP’s August reduction, as inflation pressures remain manageable.

Governor Eli Remolona Jr. indicated that another 25-basis-point cut could occur in December, as inflation has slowed, with September’s rate at 1.9%, the lowest in over four years. However, the BSP is monitoring potential inflation risks, such as geopolitical tensions and domestic price changes.

The BSP has revised its inflation forecast, projecting 3.1% for 2024 and adjusting the 2025 and 2026 forecasts to 3.3% and 3.7%, respectively. The central bank is cautious about making further cuts and prefers gradual adjustments unless economic conditions worsen.