MNI BSP Preview - Oct 2025: On Hold But May Ease In Dec

Executive Summary: 

• The consensus for tomorrow’s BSP meeting outcome is no change from the current 5.00% policy rate. Still, some sell-side expect a 25bps cut, with 6 out of the 25 economists surveyed by Bloomberg forecasting such a move (the remainder see rates holding steady). We sit in the no change camp, although note it may be a reasonably close call between this and a further 25bps cut.
• From an inflation standpoint, yesterday’s update for September didn’t materially change the outlook (BSP said as much after the data printed). Given this broadly unchanged backdrop and the fact that BSP Governor Remolona turned a little less dovish at the last policy meeting, it doesn’t point to a compelling case to ease from an inflation standpoint.
• Whilst downside growth risks may argue for a cut, fresh USD/PHP gains following a further BSP cut, could be an unwelcome development for the BSP. Additionally, the central bank gets an important Q3 GDP update on Nov 7, which comes ahead of the Dec BSP meeting. Hence the central bank may wait to assess growth trends at that meeting (with a window to cut), particularly given a broadly unchanged inflation backdrop in recent months.  
• See the full preview BSP Preview - Oct 2025.pdf: