BSP Slashes Rates Again: Policy Rate Now at 4.25% as Economy Struggles to Bounce Back
The Bangko Sentral ng Pilipinas pulled the trigger on yet another rate cut Thursday, slashing the benchmark interest rate by 25 basis points to bring it down to 4.25%. This marks the ninth time the central bank has cut rates since it began its easing cycle back in August 2024 — a clear signal that the economy needs all the help it can get.
BSP Governor Eli Remolona Jr. acknowledged that economic growth has been slower than expected, with the flood control projects scandal — ang corruption issue na bumigay sa tiwala ng publiko — severely denting both consumer and investor confidence. “Our decision today may actually help to restore confidence, boosting investment and consumption,” Remolona said.
The numbers tell the story: the Marcos administration missed its economic growth targets for the third consecutive year in 2025, with the economy growing just 4.4% amid a contraction in government infrastructure spending. Remolona admitted that confidence played a much bigger role in economic performance than their models had predicted.
Looking ahead, the BSP is cautiously optimistic that the economy could rebound in the second half of 2026, with an initial forecast of 4.6% growth for the year. But Remolona stressed that everything hinges on how quickly confidence returns — something that’s hard to predict given the political and economic headwinds.
For ordinary Filipinos, the rate cut means cheaper borrowing costs for loans, mortgages, and credit. Whether that translates to real economic relief on the ground remains to be seen, but the BSP is clearly betting that lower rates can help jumpstart a recovery that’s been painfully slow to materialize.
Source: Rappler
