The Market Monitor Minding the Nation's Business
By DIEGO C. CAGAHASTIAN
WHO says that President Ferdinand “Bongbong” Marcos Jr. is all parties, parries, and politics?
The President finds time to do real work, such as when he met with Bangko Sentral ng Pilipinas Governor Eli Remolona last Wednesday to review the October 2025 monetary policy decision in the light of recent financial and social indicators, and to assess the economic lay of the land.
During the meeting with the Chief Executive, it was established that the Philippine economy suffered “poor growth” in 2025, although this year still has to run until December 31.
Both the BSP governor and the Chief Executive had to admit the obvious: lackluster economic performance, high prices, increasing unemployment, higher bond yields, not to mention punishing US tariff rates.
But what exactly is the monetary policy of October, 2025?
On Oct. 9, 2025, the Monetary Board, the policy-making body of the BSP, decided to reduce the Bangko Sentral ng Pilipinas Target Reverse Rate by 25 basis points to 4.75 percent.
Accordingly, the interest rates on the overnight deposit and lending facilities were set at 4.25 percent and 5.25 percent, respectively.
The BSP added that applying the new overnight lending rate as reference, the applicable peso Discount Window Facility (DWF) interest rates, effective Oct. 13, 2025, are as follows: For Loan Maturity of 1 – 90 days, 5.9294 percent; and for Loan Maturity of 91 – 180 days, 6.1088 percent.
Meanwhile, the United States (US) dollar and the Japanese yen DWF interest rates remain the same.
For the US dollar, 6.46965 % for 1-90 days, 91-180 days and 181-360 days. For the yen, it is 2.70164 for loans maturing in 1-90 days.
Marcos and Remolona, however, expressed optimism that the nation’s economic performance will improve next year, and continue its full recovery the following year.
They established that the economy is expected to recover by 2026 and return to the government’s target range by 2027.
Malacañang said the BSP reported that inflation has eased to 1.7%, with inflation for the bottom 30% of households at –0.4%. This allows the Monetary Board to cut the policy rate to 4.75% to support more affordable borrowing for families and businesses.
The President asked the BSP governor what can be done to pump-prime the economy, and he was assured by Remolona that they already reduced the policy rate to ease credit, ease liquidity and stimulate more demand.
The inflation outlook was good enough for the Philippines to be confident about reducing the policy rate. For 2026, the inflation forecast is about 3.1%, which is basically the target. Inflation’s guess number for 202y is about 2.8 percent.
Meanwhile, the Moody’s Analytics said the Asia Pacific growth will slow down in 2026 as the export surge that powered 2025 fades.
“Weak domestic demand is limiting the region’s ability to offset the drag from higher US tariffs and is weighing on prices. Tariffs, financial market jitters, and the artificial intelligence boom have flipped long-standing growth patterns,” said Moody’s Analytics.
Despite calls for his resignation due to mismanagement and corruption in government, especially in the Department of Public Works and Highways, President Marcos is confident that he will weather the political crisis by concentrating on solving the nation’s economic woes.
Marcos reaffirmed his administration’s commitment to safeguarding economic stability and creating conditions for sustained, broad-based growth for the nation.