Economists expect the Bangko Sentral ng Pilipinas (BSP) to cut its key policy rate by 25 basis points (bps) at the upcoming Monetary Board meeting on Dec. 11, citing still-benign inflation and the need to stimulate economic growth.1
Headline inflation in November 2025 eased to 1.5 percent, a level well below the BSP’s target, giving policymakers room to ease monetary conditions.
Four economists polled by Manila Standard anticipate a 25-bps reduction this week, with the monetary easing cycle aimed at spurring greater economic activity through lower borrowing rates, especially as the Philippine economy saw slower growth this year partly due to weather-related disruptions and domestic political issues.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said both the latest inflation figure and the economic slowdown “would justify further $-0.25$ bps rate cut on the next BSP rate-setting meeting on Dec. 11, 2025, as signaled lately by local monetary officials to further spur greater economic growth as long as there is monetary policy space and fiscal policy leeway; provided that the US dollar/peso exchange rate remains relatively stable.”
The expectation was echoed by Security Bank chief economist Angelo Taningco, who also foresees a 25 bps cut amid a subdued inflation environment.
Reyes Tacandong & Co. Senior adviser at Jonathan Ravelas also expects rates to be cut to 4.50 percent, but projects deeper cuts of 50 bps to 4.0 percent in the first half of 2026.
Thony Rose Lesaca
Oikonomia Advisory and Research Inc. economist Matt Erece offered a “conservative” forecast of a 25 bps rate cut.
Erece warned that while low inflation allows for a cut, a deeper 50 bps reduction “may be too deep given its risk on the peso,” noting that recent large capital outflows have already put pressure on the currency.
Bank of the Philippine Islands lead economist Jun Neri also expects a 25 bps cut, suggesting a gradual easing path could lower policy rates to 4.0 percent next year.
Neri cautioned, however, that an overly aggressive easing cycle could risk forcing the BSP into an abrupt reversal and sharper-than-ideal rate hikes later if inflation unexpectedly picks up in 2026.
Metrobank chief economist Nicholas Mapa also forecasts a 25 bps rate cut this December, emphasizing the continuation of “baby steps” to support sagging growth momentum.
Mapa noted that with inflation “still below target and forecast to remain target consistent over the policy horizon, the BSP is likely to consider cutting rates further to support sagging growth momentum.”
