The policy-setting Monetary Board on Thursday decided to reduce the Target Reverse Repurchase (RRP) Rate of the Bangko Sentral ng Pilipinas (BSP) by 25 basis points (bps) to 5.50 percent, BSP Governor and Monetary Board chief Eli M. Remolona Jr. said.
Interest rates on overnight deposit and lending facilities were adjusted accordingly to 5.0 percent and 6.0 percent, respectively, the BSP said.
The “more manageable inflation outlook and the risks to growth allow for a shift toward a more accommodative monetary policy stance,” Remolona said in a statement.
“The latest inflation forecasts have declined from the forecasts of the February policy meeting. Inflation expectations also remain within target,” Remolona said.
The risk-adjusted inflation forecast for 2025 fell to 2.3 percent from 3.5 percent, while the forecast for 2026 declined to 3.3 percent from 3.7 percent. For 2027, the risk-adjusted inflation forecast stands at 3.2 percent.
All three forecast figures are well within the target range of between 2 and 4 percent set by the central bank for 2025, 2026 and 2027.
Remolona said the risks to the inflation outlook have also eased and continue to be broadly balanced from 2025 to 2027.
He said upside pressures come from possible increases in transport charges, meat prices and utility rates. Downside risks, meanwhile, are linked to the continuing effects of lower tariffs on rice imports and the expected impact of weaker global demand.
