BSP Holds Rate at 6.50%, Peso Faces Volatility, Loan Growth Stabilizes

Manila, Philippines – June 25, 2025 – The Bangko Sentral ng Pilipinas (BSP) maintained its benchmark policy rate at 6.50% during its recent policy review, citing continued inflationary risks and global economic uncertainties. Meanwhile, the Philippine peso experienced slight volatility amid international financial market pressures, and loan demand began showing signs of stabilization following a slow start to the year.

BSP Maintains Cautious Monetary Stance

Despite April’s inflation easing to 3.6%, the BSP decided to hold the key interest rate unchanged at 6.50%. BSP Governor Eli Remolona emphasized caution, highlighting persistent uncertainties in global markets and potential domestic price pressures.

“We remain vigilant and data-dependent. It’s premature to consider easing policy until we see consistent evidence of sustained inflation moderation,” said Remolona.

The next Monetary Board policy meeting is scheduled for July 12, 2025.

Philippine Peso Weakens Slightly to ₱56.18/USD

The Philippine peso faced mild pressure, trading as low as ₱56.18 per US dollar in recent sessions. The slight depreciation was largely influenced by hawkish statements from the U.S. Federal Reserve regarding delayed interest rate cuts, coupled with increased corporate demand for foreign currency.

Market analysts predict the peso will remain within the ₱55.90–56.30 range this week, with the upcoming inflation report and remittance data seen as critical determinants for near-term direction.

Loan Activity Shows Signs of Recovery

Bank lending activity has begun to stabilize, showing modest growth after experiencing a slowdown earlier this year. According to BSP data, total lending expanded by 6.9% year-on-year as of May 2025, driven by:

• Corporate loans, particularly in logistics and manufacturing sectors.
• Consumer loans, led by credit cards and salary-based lending.
• Digital lending platforms maintaining cautious but steady lending volumes.

The recovery in credit growth signals increased economic confidence and moderate consumer demand resilience despite persistent high-interest rates.

Key Factors Shaping Market Sentiment

• Global monetary policy uncertainty: U.S. Federal Reserve’s cautious stance keeping global yields high.
• Domestic inflation trajectory: BSP watching closely for consistent inflation moderation.
• Peso volatility: Influencing import-heavy sectors and overall market confidence.
• Steady remittance inflows: Supporting consumer spending and household incomes.

✍️ Author:

Marco Reyes – Editor at Cash24.ph

📰 Sources:

• Bangko Sentral ng Pilipinas (BSP) – https://bsp.gov.ph
• Philippine Statistics Authority (PSA)
• BusinessWorld
• Metrobank Research

This article was written and published by the editorial team at Cash24.ph, based on verified data and reports from BSP, PSA, and reputable financial news sources.