THE BANGKO SENTRAL ng Pilipinas (BSP) could cut policy rates again at its December meeting, its governor said on Tuesday.

“I would say it’s possible,” BSP Governor Eli M. Remolona, Jr. told reporters when asked about the likelihood of rate cuts at the Monetary Board’s Dec. 11 meeting.

However, he ruled out a jumbo cut, noting that the next rate cut will likely be another “baby step” or by 25 basis points (bps).

The Monetary Board delivered a 25-bp cut at its Oct. 9 meeting, bringing the benchmark policy rate to an over three-year low of 4.75%, as both its economic outlook and investor confidence weakened amid the flood control corruption scandal.

It has so far lowered borrowing costs by a total of 175 bps since it began its easing cycle in August 2024.

Another rate cut at the Monetary Board’s last meeting this year on Dec. 11 would mark its fifth consecutive cut since April.

Mr. Remolona said they are still considering whether the weaker-than-expected third-quarter gross domestic product (GDP) growth was due to a slowdown in demand or supply.

“Kung supply side, wala kaming magagawa (If it’s from the supply side, we can’t do anything),” he told reporters on the sidelines of the Financial Education Stakeholders’ Congress 2025 on Tuesday. “So, how much is demand?… We’ll have to figure out how much is demand and how much is supply.”

In the third quarter, the Philippine economy grew by 4%, the slowest growth in over four years, as a corruption scandal weighed on government spending and dampened investor and consumer confidence.

For the nine-month period, GDP growth averaged 5%, below the government’s 5.5-6.5% target for the year.

Meanwhile, the central bank chief said the Monetary Board is still deciding if they would trim banks’ reserve requirement ratio (RRR).

“Pinag-iisipan pa ’yun… Inaayos pa namin ’yung liquidity sa system kung gaano karami, kung sobra-sobra. Kasi pag binaba mo yung reserve requirement dadami pa ’yung liquidity (That is still being considered… We are still fixing the liquidity in the system (to see) how much there is, if it’s excessive. Because if you lower the reserve requirement, liquidity will increase further),” Mr. Remolona said.

In February, the BSP cut universal and commercial banks and nonbank financial institutions with quasi-banking functions’ RRR by 200 bps to 5%. Digital banks’ RRR was reduced by 150 bps to 2.5%, while thrift banks’ RRR was lowered by 100 bps to 0%.

The RRR cuts took effect in the week of March 28.

Also, Mr. Remolona said they are not worried about the peso’s recent movement but noted that they have been intervening a bit in the foreign exchange market.

“Konti lang, para hindi lang magulo masyado (Just a little, so it’s not too messy),” he said.

The BSP chief earlier said they would only intervene if the peso depreciates so sharply that it would become inflationary.

On Tuesday, the local unit weakened to P58.985 against the dollar, slipping by 5.4 centavos from its P58.931 finish on Monday, data from the Bankers Association of the Philippines showed.

On Nov. 12, the peso slumped to a record low of P59.17 versus the greenback. — Katherine K. Chan