‘Uncertainty’ prompts central bank to keep rates steady at 5.75%

February 13, 2025 | 6:00pm

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) Monetary Board has opted to maintain its key policy rate at 5.75%.

As a result, the interest rates on the overnight deposit and lending facilities will remain steady at 5.25% and 6.25%, respectively.

During a press briefing on Thursday, February 13, BSP Governor Eli Remolona said the central bank needs additional time to recalibrate its models amid global economic uncertainty, particularly regarding trade policies.

"The Monetary Board noted that domestic growth prospects continue to be firm. However, uncertainty over global economic policies and their impact on the domestic economy has increased significantly," Remolona said.

He added that uncertainty over inflation and economic growth justifies maintaining current monetary policy settings.

“Before deciding on the timing and magnitude of further reductions in the policy interest rate, the Monetary Board deems it prudent to await further assessments of the impact of global policy uncertainty and the potential effects of the actual policies," he added.

The central bank’s monetary board has maintained its key interest rates, when it implemented a 25-basis-point reduction in December 2024.

Inflation forecasts remain broadly aligned with December’s projections. The central bank adjusted its risk-based inflation forecast for 2025 slightly upward to 3.5% from 3.4%, while maintaining the 2026 forecast at 3.7%.

“Inflation expectations remain within the target range,” read an official BSP statement.

The central bank also noted a more balanced risk profile for inflation in 2025 and 2026. Upward pressure is also anticipated from the utilities sector, while lower rice import tariffs continue to pose a downside risk.