The Central Bank of the Philippines lowered its benchmark interest rate by 25 bps to 5.25% during its June 2025 policy meeting, marking the lowest rate in two and a half years and in line with market expectations. BSP Governor Eli Remolona said the decision reflects a more moderate inflation outlook and the need to support growth with a more accommodative stance.
He cautioned, however, that risks from geopolitical tensions and external policy uncertainties remain. The annual inflation rate edged down to 1.3% in May 2025 from 1.4% in the previous month, matching market forecasts and marking the lowest level since November 2019. The inflation forecast for 2025 was revised downward from 2.4% to 1.6%, reflecting easing price pressures. In contrast, projections for 2026 and 2027 were adjusted slightly upward—from 3.3% to 3.4%, and from 3.2% to 3.3%, respectively. Meanwhile, the rates on the BSP’s overnight deposit and lending facilities were also reduced to 4.75% and 5.75%, respectively.
