METROBANK on Friday said the Bangko Sentral ng Pilipinas may further cut monetary policy rates this year as inflation remains stable.
Policy rate cuts reduce borrowing costs for banks, encouraging lending, boosting consumer and business spending to stimulate economic growth.
“While inflation is moving higher from recent lows, it remains well-anchored within the central bank’s target. This gives policymakers room to continue supporting growth, even as demand-side pressures gradually build,” Metrobank pointed out, as it forecast a cumulative 50-basis-point policy rate cut, bringing the reverse repurchase (RRP) rate to 4 percent by yearend.
The RRP rate is the interest rate at which the BSP borrows money from commercial banks by selling them government securities, with an agreement to buy them back later.
In January, headline inflation — which covers all goods and services — was at 2 percent year-on-year, slightly higher than December’s 1.8 percent, but still within the BSP’s 3 ± 1 percent target range.
Core inflation — which excludes volatile food and energy items — was 2.8 percent, reflecting early signs of normalized demand and recovery of the economy.
The main upward pressure came from housing, water, electricity, gas, and other fuels, “driven by annual rental adjustments outside the National Capital Region and higher electricity rates,” Metrobank noted.
Meanwhile, food inflation eased to 1.1 percent due to lower prices across major items, and continued rice deflation which tempered overall price growth.
Metrobank maintained its 2026 inflation forecast at 3.3 percent, citing low base effects and recovering demand that may push prices higher in the second half of the year.
These increases are expected to be partly offset by softer consumer spending and supply-side factors, such as the lifting of the temporary suspension of rice imports.
Barring major supply shocks, the current inflation rate supports a measured, data-driven policy path that allows the economy to gain momentum without triggering excessive price pressures, Metrobank said.
Metrobank shares on Friday declined by P0.90, or 1.25 percent, to close at P71.10.
