A stable currency, low inflation, low unemployment and an increasingly business-friendly environment bode well for the Philippines. That said, President Trump’s tariffs do pose a potential challenge to the government’s ambitions to attract foreign investment, particularly given that 32% of FDI into ASEAN in 2023 came from the USA.
Monetary Policy, Inflation & Interest Rates
With inflation risks easing, the Bangko Sentral ng Pilipinas (BSP) cut its policy rate by 25bp to 5.50% on 10 April, also adjusting the overnight deposit and lending rates to 5.00% and 6.00% respectively. The move reflects the Bank’s push for a more accommodative stance, though it’s likely to proceed cautiously from here. Policymakers remain alert to global headwinds, along with domestic risks tied to food and utility prices. Risk-adjusted inflation forecasts for 2025 range from 3.5% to 2.3%, rising slightly to 3.7–3.3% in 2026. As of 10 April, the peso stood at 57.37 PHP/USD, holding steady in a tight range bet...
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