Manila: The Bangko Sentral ng Pilipinas (BSP) on Thursday reiterated that its monetary easing cycle is "nearing its end," as domestic demand is expected to improve following a series of policy rate cuts since 2024. Inflation rose to 2 percent in January from 1.8 percent in December 2025, settling at the lower end of the government's 2 percent to 4 percent target range. The figure is within the BSP's January inflation forecast of 1.4 percent to 2.2 percent.

According to Philippines News Agency, the BSP stated, "The inflation outlook continues to be benign while inflation expectations remain well anchored." It noted that domestic economic output is expected to remain weak, citing continued declines in business sentiment due to governance concerns and uncertainty over global trade policy.

"Nevertheless, domestic demand is expected to rebound gradually as the effects of monetary policy easing work their way through the economy and public spending improves," the BSP said. "On balance, the Monetary Board sees the monetary policy easing cycle as nearing its end. Any further easing is likely to be limited and guided by incoming data."

The first policy rate-setting meeting of the Monetary Board this year is scheduled for Feb. 19, during which the BSP is widely expected to further cut key interest rates. Since August 2024, the BSP has reduced key policy rates by a total of 200 basis points to support domestic growth, as inflation remained low, averaging 1.7 percent last year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort commented that the January inflation remains "relatively benign." He forecasts inflation to average 3 percent this year. "Nevertheless, that could still support monetary easing measures such as cuts in local policy rates and banks' reserve requirement ratio (RRR), as part of the policy priorities to boost economic/GDP (gross domestic product) growth," Ricafort said.