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Alexis Romero - The Philippine Star
January 22, 2026 | 12:00am
BSP Governor Eli Remolona Jr. met with the President at Malacañang on Tuesday to discuss the Philippines’ economic prospects and the central bank’s move to cut interest rates.
Businessworld / File
MANILA, Philippines — The monetary policy easing cycle may be nearing its end, the Bangko Sentral ng Pilipinas (BSP) said, as it briefed President Marcos on the country’s economic outlook.
BSP Governor Eli Remolona Jr. met with the President at Malacañang on Tuesday to discuss the Philippines’ economic prospects and the central bank’s move to cut interest rates.
Remolona said the Monetary Board (MB), the central bank’s highest policy-making body, slashed the key policy interest rate to 4.5 percent last month from 4.75 percent in October 2025.
The board also reduced interest rates on overnight deposits from 4.25 percent to four percent and on overnight lending facilities from 5.25 percent to five percent.
“In its latest monetary policy meeting, the BSP projected that economic growth would remain modest through the first semester of 2026 before a rebound in 2027 that is partly supported by earlier policy easing,” the Presidential Communications Office (PCO) said in a statement issued yesterday.
“The MB sees its current monetary policy easing cycle as nearing its end,” it added.
During the monetary policy press briefing last December, Remolona noted that economic growth slowed more than expected to four percent in the third quarter, citing weak sentiment that stemmed from the corruption controversy. But he said the country is expected to recover this year and in 2027 partly due to previous rate cuts.
According to Remolona, it usually takes one to two years for monetary policy to exert its full effect.
“We also hope that government infrastructure spending will return to normal levels and be more effective with reduced leakages, and that investor sentiment and consumer sentiment will improve,” the BSP chief said.
“That said, the BSP may be nearing the end of its easing cycle, with any future easing likely to be limited. We will be assessing the effects of the rate cuts we have made so far, together with other economic developments including possible supply shocks,” he added.
The BSP chief said the inflation outlook is “broadly benign with expectations well-anchored.”
“That means inflation is relatively low and businesses, households and economists believe it will stay low or within the BSP’s target,” Remolona said.
“We expect inflation to be below target this year, but it should be back to target in 2026 and 2027.”
The PCO said the World Bank expects the Philippine economy to recover over the next two years.
The multilateral lender sees a boost in private consumption if inflation stays low, employment remains strong and monetary easing lowers interest rates and encourages businesses and households to spend and invest more, the agency added.
