Bangko Sentral ng Pilipinas issues statement after CPI data

Bangko Sentral ng Pilipinas issues statement after CPI data

The Bangko Sentral ng Pilipinas (BSP) has released a statement following the release of the Consumer Price Index (CPI) data for August 2025. The data showed that inflation in the Philippines accelerated to 1.5% year-on-year, slightly above the median estimate of 1.2% in a Bloomberg News survey [1]. This figure is within the BSP’s projected range of 1% to 1.8% for August, which is below its target range of 2% to 4% [2].

The BSP Governor, Eli Remolona, has indicated that the central bank may continue to reduce the key interest rate, which currently stands at 5%, if prices remain stable and domestic demand holds. This move is aimed at supporting economic growth while keeping inflation under control. Remolona noted that the Philippines has reached a "sweet spot" for inflation and output growth, but left the door open for further rate cuts if demand weakens [1].

The acceleration in inflation was primarily driven by an uptick in vegetable and fish prices due to unfavorable weather conditions in August. However, this increase was partially offset by the continued decline in rice prices and lower meat costs. The BSP has been closely monitoring the impact of the 19% US tariff rate on Philippine goods, which could potentially lead to a decline in exports [2].

The BSP's recent monetary policy decisions reflect its commitment to maintaining a stable macroeconomic environment. The central bank's flexibility to adjust interest rates based on the latest economic data underscores its proactive approach to managing inflation and supporting economic growth.

References:
[1] https://www.bloomberg.com/news/articles/2025-09-05/tame-philippine-inflation-may-support-more-monetary-easing
[2] https://www.rappler.com/business/inflation-rate-philippines-august-2025/