The Philippine central bank on Thursday said it decided to reduce its target reverse repurchase rate by 25 basis points to 4.25 percent and the interest rates on the overnight deposit and lending facilities to 3.75 percent and 4.75 percent, respectively.
The Bangko Sentral ng Pilipinas (BSP) said in its press release that the outlook for inflation remains manageable. However, it noted that forecasts for 2026 have risen slightly, mainly due to supply-side pressures that are likely to be temporary.
Nevertheless, inflation expectations remain firmly anchored, and inflation is seen to return close to the 3 percent target by 2027, the BSP said.
Economic growth has undershot the BSP's expectations due to weaker domestic demand. Latest indicators point to a recovery in the second half of the year, but growth will depend largely on how quickly confidence recovers.
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