BSP cuts key rate to 4.75%, adjusts discount window rates

The Bangko Sentral ng Pilipinas (BSP) announced on Oct. 9, 2025, that its Monetary Board approved a 25-basis-point cut in the benchmark Target Reverse Repurchase (RRP) Rate, bringing it down to 4.75 percent effective Oct. 13.

Following the adjustment, the interest rates on the BSP’s overnight deposit and lending facilities were set at 4.25 percent and 5.25 percent, respectively.

The decision also led to new peso Discount Window Facility (DWF) interest rates, which serve as reference rates for short-term lending by the BSP to qualified financial institutions.

Effective Oct. 13, 2025, the peso DWF rates were set at 5.9294 percent for loans with maturities of one to 90 days and 6.1088 percent for loans with maturities of 91 to 180 days.

Meanwhile, the United States (US) dollar and Japanese yen DWF interest rates remain unchanged, with the US dollar facility maintaining a flat rate of 6.46965 percent across all maturities from one to 360 days.

The Japanese yen facility also retained its existing rates of 2.70164 percent for one to 90 days, 2.75844 percent for 91 to 180 days, and 2.88250 percent for 181 to 360 days.

The BSP said the foreign currency DWF rates are based on prevailing international benchmark rates and may be adjusted periodically to reflect changes in global market conditions.

According to the central bank, adjustments to the DWF interest rates align with its monetary policy stance and are designed to complement broader efforts to maintain price stability and support economic growth.

The rate cut, the first since early 2024, signals a shift toward a more accommodative monetary policy stance as inflation continues to moderate and domestic growth shows signs of recovery.

For ordinary consumers, the policy easing may translate to slightly lower borrowing costs for businesses and households, potentially stimulating spending and investment.

The BSP’s decision also reflects a careful balance between supporting economic momentum and keeping inflation expectations anchored within the 2–4 percent target range.

Economists said the move could help strengthen liquidity conditions in the financial system, while banks are expected to gradually adjust their lending and deposit rates in response to the latest policy shift.

The BSP added that it will continue to monitor key economic indicators—such as inflation, exchange rate movements, and external developments—to guide future policy decisions in line with its price and financial stability mandates.