One more cut likely next year – Remolona

Why One More Rate Cut Might Be on the Horizon Insights from BSP Governor Remolona

As we enter 2026, market analysts and investors are keenly interested in the future direction of interest rates in the Philippines. According to Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona, there is a possibility that the central bank may cut key interest rates one more time next year.

To understand why this might be the case, it's essential to consider the broader economic context. The BSP has been easing monetary policy to alleviate concerns about domestic economic growth, which has slowed significantly in recent quarters.

A Potential Rate Cut Insights from Governor Remolona

In a recent interview with reporters at the 4th Digital Financial Inclusion Awards, Remolona shared his thoughts on the possibility of another rate cut. According to him, any decision would depend on incoming data and would not be aggressive or outside of scheduled policy meetings.

So, what's driving this potential cut? The outlook for domestic economic growth has weakened further, with overall business sentiment continuing to decline due to concerns about governance issues and lingering uncertainty over global trade policy.

The Easing Cycle Nearing Its End

While the Monetary Board noted that the easing cycle is nearing its end, it also acknowledged that further cuts will likely be limited and guided by incoming data. This suggests that the BSP is carefully considering the impact of future rate cuts on the economy, rather than acting impulsively.

A Look Ahead to 2026

What can we expect in 2026? According to BMI, a Fitch Group unit, the BSP may cut interest rates twice more next year, starting with another 25 basis points in February. This would be driven by slow economic growth and well-anchored inflation expectations.

While this is just one perspective, it's an important consideration as we look ahead to what lies ahead for interest rates in the Philippines.

Conclusion

In conclusion, while there are many factors at play, Remolona's comments suggest that a one more rate cut might be on the horizon. In our next post, we'll explore how you can adapt to this changing landscape and make the most of your financial goals.

Keywords rate cut, BSP Governor Eli Remolona, monetary policy, interest rates, economic growth, inflation expectations

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.