The Monetary Board reduced the BSP’s target reverse repurchase rate by 25 basis points to 4.50 percent at its monetary policy meeting on 11 December 2025. Correspondingly, the rates on the overnight deposit and lending facilities were adjusted to 4.00 percent and 5.00 percent, respectively. Read more

Inflation is projected to settle within the target range in 2026 and 2027 after a subdued inflation environment in 2025. Compared with the previous round, inflation projections over the forecast horizon are lower, largely reflecting the decline in oil prices. This downward impact is partly offset by the lagged impact of the BSP’s policy rate reductions in August and October 2025, as well as peso depreciation. Read more

Headline inflation decelerated from 1.7 percent in October 2025 to 1.5 percent in November 2025. Food inflation eased due to a stable supply of vegetables, the lifting of the ban on chicken imports, and direct government measures to moderate rice prices. Meanwhile, electricity rates and domestic prices of selected petroleum products increased, contributing to higher non-food inflation. November 2025 inflation outturn was within the BSP’s month-ahead forecast range of 1.1–1.9 percent. Read more

Extreme inflation episodes can undermine price stability and threaten broader macroeconomic stability. For inflation-targeting central banks such as the Bangko Sentral ng Pilipinas (BSP), understanding the risks associated with extreme inflation outcomes is critical to achieving price stability. However, focusing solely on point estimates or conditional mean projections is insufficient to fully understand inflation dynamics. Economic relationships may vary depending on the state of the economy—for example, whether inflation is low or high. Thus, quantifying tail risks allows policymakers to implement proactive and appropriate monetary policy interventions to better manage extreme inflationary episodes. Read more