2026.02.1906:39:07UTC+00Philippine Central Bank Cuts Rate as Expected

The Central Bank of the Philippines cut its benchmark interest rate by 25 basis points to 4.25% at its February 2026 meeting, bringing total monetary easing since August 2024 to 225 basis points. The widely anticipated move was made as contained inflation gave policymakers room to support an economy weakened by softer domestic demand and the fallout from a major infrastructure-related corruption scandal.

Economic growth slowed to around 3% in the last quarter, one of the weakest performances in Southeast Asia, as business and consumer confidence deteriorated. Although the inflation outlook remains broadly contained, the central bank revised its 2026 inflation forecast slightly higher, citing mainly temporary supply-side pressures. Even so, inflation is still expected to move back toward the 3% target by 2027.

The central bank noted that economic activity could strengthen in the second half of the year if confidence improves, and emphasized that future policy decisions will remain data-dependent. In line with the policy rate cut, the overnight deposit rate was reduced to 3.75% and the overnight lending rate to 4.75%.