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Economy
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BSP Update: The rate cuts continue
Monetary authorities lowered interest rates to cushion against weak consumer and business sentiment
October 9, 2025
By Metrobank Research
By Metrobank Research
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The Bangko Sentral ng Pilipinas (BSP) cut policy rates by a quarter point, narrowing the interest rate differential between the BSP and the Federal Reserve (Fed) to 50 basis points (bps).
Key points
- The BSP reduced its target Reverse Repurchase (RRP) rate by 25 bps to 4.75% in its October 9 meeting.
- BSP Governor Eli Remolona said that the BSP’s monetary policy “sweet spot” may be lower than expected.
- The BSP’s projection of a lower terminal rate suggests the central bank will reduce rates further.
Moving forward
- Metrobank forecasts another 25-bp cut in the BSP’s policy rate during the BSP’s last Monetary Board (MB) meeting for the year, followed by another 25-bp cut in the first quarter of 2026.
- This will bring the BSP’s target RRP down to 4.50% by end-2025 and to 4.25% by end-2026.
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