The Central Bank of the Philippines has reduced its benchmark interest rate by 25 basis points to 4.50% during its final meeting of the year, in line with market expectations. This adjustment brings the borrowing rate to its lowest point since October 2022. Since the commencement of the ongoing easing cycle in August 2024, the cumulative rate cuts have now reached 2 percentage points. The Monetary Board indicated that inflation remains subdued, with growth in prices staying within the target range and expectations remaining stable. The forecast for inflation in 2026 and 2027 have been slightly adjusted to 3.2% and 3.0%, respectively. Domestically, growth has further slowed, influenced by diminished business sentiment, issues in governance, and persistent uncertainties in global trade. However, demand is anticipated to recover gradually as the effects of monetary easing and increased public spending become apparent. On balance, the BSP has suggested that the easing cycle is approaching its conclusion. The overnight deposit and lending facility rates have been cut to 4.00% and 5.00%, respectively.