28.08.202506:44:37UTC+00Philippines Central Bank Cuts Rate as Expected

The Central Bank of the Philippines, during its August 2025 meeting, opted to decrease its benchmark interest rate by 25 basis points to 5%, a move that was anticipated by the market and has brought the rate to its lowest since November 2022. In July 2025, the annual inflation rate dipped to 0.9%, down from 1.4% in June, marking its lowest level since October 2019. The central bank maintains a largely stable outlook on inflation, projecting rates of 1.7% for 2025, 3.3% for 2026, and 3.4% for 2027. Nonetheless, potential increases in electricity rates and rice tariffs could pose upward risks to this inflation forecast over the policy period. Domestically, demand remains strong; however, external challenges, notably the impact of U.S. policy changes on global trade and investment, continue to exert pressure on international economic activities, thus affecting the economic prospects of the Philippines. Furthermore, the central bank has adjusted its overnight deposit and lending facility rates to 4.5% and 5.5%, respectively.