By Katherine K. Chan, Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) said one other rate cut this 12 months is uncertain amid current economic conditions, signaling a looming end to its current easing cycle.
Asked if he sees yet another cut under the present easing cycle, BSP Governor Eli M. Remolona, Jr. said: “Even that cut continues to be a perhaps. Hindi pa sigurado. (It’s not certain).”
On the sidelines of a BSP event on Friday, the central bank chief told reporters they might consider subdued inflation and tepid growth to spur demand in deciding on their next policy move.
Nonetheless, Mr. Remolona noted that a weaker-than-expected output within the fourth quarter of 2025 may not robotically warrant a discount to the important thing rate of interest in February.
“It could help us resolve (whether) to chop (but) it’s not the one factor,” he said, adding that inflation stays the highest deciding factor for the Monetary Board.
The BSP has been on an easing path since August 2024. It has lowered key borrowing costs by a complete of 200 basis points (bps), bringing it to an over three-year low of 4.5%.
In 2025, it delivered five straight 25-bp cuts, including its last two cuts driven by benign inflation and dim investor and consumer sentiment amid the flood control corruption scandal.
The economy slumped within the third quarter of last 12 months to an over four-year low of 4% because the flood mess dampened government spending and household consumption. As of September, the Philippine gross domestic product (GDP) growth stood at 5%.
The BSP expects GDP growth to settle at sub-4% within the last quarter of 2025 to bring the full-year print to 4.6%. If realized, the federal government would miss its 5.5%-6.5% goal for the 12 months.
The Monetary Board is about to carry its first policy review this 12 months on Feb. 19.
John Paolo R. Rivera, a senior research fellow on the Philippine Institute for Development Studies, said the governor’s tone shift implies that a sixth consecutive cut is now unlikely.
“Governor Eli’s more cautious tone signals that a February cut isn’t any longer a base case and that the BSP is shifting toward risk management amid PHP (Philippine peso) weakness and unsure inflation dynamics,” he said in a Viber message. “Markets may now price a shallower or earlier end to the easing cycle.”
Mr. Rivera added that the peso may gain some support if the Monetary Board decides to carry regular at its first policy review this 12 months but noted that economic growth may get the shorter end of the stick.
“A pause at the primary meeting would help anchor expectations and reduce forex (foreign exchange) pressure, but it surely also means less monetary support for growth, putting more weight on fiscal execution and structural reforms to hold the expansion,” he said.
The Philippine Statistics Authority will release the fourth-quarter and full-year GDP report on Thursday, Jan. 29.
Meanwhile, Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort said sluggish fourth-quarter growth and the peso’s volatility would call for an additional 25-bp cut next month.
“Two important aspects for a possible (25-bp) BSP rate cut on the subsequent BSP rate-setting meeting on Feb. 19, 2026: Delicate balancing act to further support economic/GDP growth especially if the newest data… would remain soft,” Mr. Ricafort said via Viber.
“(A)nother vital consideration can be the necessity to stabilize the peso exchange rate versus the US dollar… (and) the expected Fed rate pause for now, as one other (25-bp) BSP rate cut on Feb. 19, 2026 would cut the rate of interest differential to the bottom on record at (50 bps),” he added.
Mr. Remolona said they’re considering the US Federal Reserve’s monetary policy moves but noted that “it’s one data point amongst many.”
The Fed has thus far delivered 175 bps in cuts since September 2024, bringing its key policy rate to the three.5%-3.75% range. It is about to have its first meeting this 12 months on Jan. 27-28.
Mr. Remolona also on Friday said they might defend the peso during a P60:$1 scenario depending on its movement.
Asked if the BSP would intervene once it hits P60 against the dollar, he said: “Depends (on) the way it gets there. Simply because it’s P60 doesn’t mean we’ll defend it.”
The central bank will likely persist with minimal intervention just to stop sharp swings within the local currency, the BSP chief added.
“We do what we’ve at all times done,” Mr. Remolona said. “We attempt to avoid sharp movements within the peso.”
The Palace earlier said that President Ferdinand R. Marcos, Jr. hopes the exchange rate won’t reach the P60-per-dollar level.
In response to Mr. Remolona, the peso won’t trade at P60 versus the greenback anytime soon.
The peso fell to P59.46 against the dollar on Jan. 15, marking a fresh low for the local unit after it exceeded the previous record of P59.44 on Jan. 14.
It recovered to a P59.09 finish on Friday, gaining seven centavos from its P59.16 close on Thursday, based on data from the Bankers’ Association of the Philippines.