The Monetary Board of Bangko Sentral ng Pilipinas (BSP) cut the Target Reverse Repurchase (RRP) rate by 25 bp to 4.25 %, simultaneously trimming the overnight deposit and lending facility rates to 3.75 % and 4.75 %, respectively, as softer-than-expected domestic demand and only mildly higher, supply-driven 2026 inflation forecasts justified further support to activity while price pressures remain “manageable.” The move extends an easing cycle that has delivered 150 bp of cumulative cuts since April 2025. With the policy corridor now set 50 bp on either side of the RRP, the central bank maintains liquidity conditions while monitoring impacts. Inflation expectations are still firmly anchored and headline inflation is projected to converge toward the 3 % target by 2027, but GDP growth has fallen short of earlier projections and hinges on a confidence-led recovery in H2 2026. The Board reiterated its data-dependent stance and pledged vigilance to ensure policy remains aligned with its price-stability and growth mandate.
Central Bank of the Philippines 2026-02-19
BSP cuts RRP by 25 bp to 4.25%, deposit to 3.75% and lending to 4.75%
Bangko Sentral ng Pilipinas cut the Target Reverse Repurchase rate by 25 bp to 4.25 %, lowering overnight deposit and lending facility rates to 3.75 % and 4.75 % and bringing cumulative easing since April 2025 to 150 bp. Citing weaker domestic demand and “manageable” inflation expected to return to the 3 % goal by 2027, the Board kept a 50 bp policy corridor and reaffirmed its data-dependent stance.