The Philippine central bank expects to maintain interest rates at present levels as inflation picked up in December 2025, with growth likely to slow in the same year, Governor Eli Remolona said.
Inflation accelerated to 1.8% in December, its fastest pace in nine months, due to rising food and clothing prices. Consumer prices were up 1.5% in November 2025. Every month, inflation picked up to 0.9% in December last year, thereby registering the sharpest increase since September 2023. However, average full-year 2025 inflation stood at 1.7%, the slowest since 2016.
Eli Remolona said the Southeast Asian country’s economic growth may have slowed to 4.6% in 2025, from 2024’s 5.7% expansion and below the government’s 5.5% to 6.5% target.
“Given the data we have right now, we are not going to cut,” Eli Remolona told a roundtable of a Manila-based club, while anticipating a recovery in growth in 2026 and 2027.
“I can say we are very close to where we want to be in terms of policy rate. There’s a chance we may cut some more or not move at all,” he said, while adding that a growth dip below 5% could justify further easing.
The Southeast Asian country’s government has slashed its growth target for 2026 to 5% to 6% and 5.5% to 6.5% in 2027, citing risks from global economic headwinds.
The central bank cut its policy rate for five straight meetings in 2025, bringing its benchmark rate to a three-year low of 4.5%.
“The target reverse repurchase rate has been slashed a cumulative 200 basis points since August 2024, an easing cycle which is nearing its end. Any further easing is likely to be limited and guided by incoming data,” the central bank said in a separate statement.