BSP Halts Interest Rate Cuts Amid Global Uncertainty, Inflation Risks

The Bangko Sentral ng Pilipinas (BSP) has decided to pause interest rate cuts, citing global trade uncertainties, despite earlier plans for continued easing.

Key BSP Policy Rates (Unchanged):

• Reverse Repurchase Rate (RRP): 5.75%
• Overnight Deposit Rate: 5.25%
• Overnight Lending Facility Rate: 6.25%

BSP Governor Eli Remolona Jr. said the Monetary Board will assess the impact of global policy shifts, particularly concerns over US trade policies under President Donald Trump.

While inflation in January hit 2.9% (within the 2.0%–4.0% target range), BSP revised its 2025 inflation forecast to 3.5% due to factors like wage hikes and utility costs.

Despite the pause, rate cuts remain on the table, with five more policy meetings scheduled for the year.

Market Reactions:

• Capital Economics expects a 100-basis-point reduction in 2025 if inflation stays controlled.
• RCBC Chief Economist Michael Ricafort believes future BSP rate cuts may align with US Federal Reserve decisions to maintain stability.