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Economy
2 MIN READ
BSP Update: Turning less dovish
As expected, monetary authorities lowered interest rates in a boost to the economy
August 28, 2025
By Metrobank Research
By Metrobank Research
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In line with Metrobank’s expectations, the Bangko Sentral ng Pilipinas (BSP) cut policy rates by a quarter point.
Key points
- The BSP reduced its target Reverse Repurchase (RRP) rate by 25 basis points (bps) to 5.00% in its August 28 meeting.
- BSP Governor Eli Remolona called the current policy rate the “Goldilocks rate,” which is neither too low nor too high.
- While Remolona signaled a less dovish stance moving forward, he also said that the BSP has room for another rate cut later in the year.
Moving forward
- Metrobank forecasts another 25-bps cut in the BSP’s policy rate later this year, followed by another cumulative 50 bps worth of cuts in 2026.
- This will bring the BSP’s target RRP down to 4.75% by end-2025 and to 4.25% by end-2026.
(Disclaimer: This is general investment information o
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