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Monetary Policy Report
February 2025
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Monetary Policy Summary Economic Outlook Current Developments Summary of MP Decisions Download Full Report
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Monetary Policy Summary
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The Monetary Board (MB) maintained the target reverse repurchase (RRP) rate at 5.75 percent at its monetary policy meeting on 13 February 2025. Correspondingly, the interest rates on the overnight deposit and lending facilities were maintained at 5.25 percent and 6.25 percent, respectively. Read more

Economic Outlook
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Inflation is projected to settle within the 2.0-4.0 percent target range over 2025-2026. The anticipated decline in rice prices from tariff reductions is expected to help guide inflation towards the midpoint of the target range in the first half of 2025. Read more
Current Developments
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Headline inflation remained within the target range of 2.0-4.0 percent in January, holding steady at 2.9 percent. Food prices saw upticks due to weather-related disruptions affecting vegetables and fish supplies, as well as ongoing African Swine Fever cases impacting meat prices. Nonetheless, these were offset by moderating non-food inflation. The January inflation outcome fell within the BSP's month-ahead forecast range of 2.5–3.3 percent. Read more
Summary of MP Decisions
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E-Commerce price index prediction with time series mining and automated machine learning
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The BSP uses the Consumer Price Index (CPI) as its primary indicator of inflation. The CPI is generated by the Philippine Statistics Authority (PSA) using data from its Retail Prices Survey (RPS). The conduct of RPS requires substantial financial resources, extensive human labor, and may be susceptible to unforeseen circumstances. As a complement to the RPS, this study uses big data analytics and machine learning (ML) techniques to create an e-commerce-based CPI. This provides the BSP with a supplementary tool for monitoring inflation trends. Read more
The Impact of Monetary Policy on Bank Lending Activity in the Philippines
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The transmission of monetary policy is important yet a complex subject in monetary economics. It is crucial because, even if monetary policy is well-designed, it holds little value if it fails to reach the broader economy. However, this process is complex due to the multiple transmission channels involved and the incomplete understanding of how these policies affect real economic outcomes (Farinha & Marques, 2001). Additionally, global trends suggest that monetary policy now appears to be less effective than in the past, though the reasons for this decline remain unclear (Kuttner & Mosser, 2002). Read more
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