The Bangko Sentral ng Pilipinas (BSP) is widely expected to deliver its third interest rate cut of 2025 later this week, trimming the benchmark rate by 25 basis points to 5 percent. Analysts cite a stable peso, subdued inflation of below one percent, and the need to support domestic demand in a sluggish global environment as key drivers of the anticipated move.
The rate adjustment would mark a continued shift toward policy easing as the BSP seeks to cushion the economy from external headwinds and reinforce consumer and investment activity. Consumer activity in the second quarter fell to minus 14, the weakest since the third quarter last year. Foreign direct investment (FDI) grew by around seven percent to over US$600 million as of April this year. With inflation remaining within target and minimal currency pressure, the central bank has room to maneuver.
Monetary authorities across the Asia-Pacific region are also navigating similar conditions. While the Bank of Korea is expected to hold rates steady this week, an October cut appears increasingly likely, pending further assessment of fiscal stimulus effects and household debt dynamics.
In contrast, analysts said the BSP appears set to move more proactively. The policy signal will be closely watched for forward guidance, particularly as regional economies attempt to balance price stability with growth concerns heading into the latter part of the year.
Analysts also said a rate cut would underscore the BSP’s commitment to a supportive stance, spurring credit activity and sustaining the country’s growth momentum amid weak external demand and persistent global uncertainties.
