MANILA – The Bangko Sentral ng Pilipinas (BSP) said its monetary easing cycle is “nearing its end,” citing low inflation and expectations of gradually improving domestic demand following a series of policy rate cuts since 2024.

Inflation rose to 2 percent in January 2026 from 1.8 percent in December 2025, remaining at the lower end of the government’s 2 to 4 percent target range and within the BSP’s forecast of 1.4 to 2.2 percent.

“The inflation outlook continues to be benign while inflation expectations remain well anchored,” the BSP said in a statement.

The central bank noted that domestic economic output is expected to remain weak due to continued declines in business sentiment driven by governance concerns and uncertainty over global trade policy.

“Nevertheless, domestic demand is expected to rebound gradually as the effects of monetary policy easing work their way through the economy and public spending improves,” the BSP added.

The Monetary Board said any further easing is likely to be limited and guided by incoming economic data. Its first policy rate-setting meeting this year is scheduled for February 19, during which further cuts in key interest rates are widely anticipated.

Since August 2024, the BSP has reduced key policy rates by a total of 200 basis points to support domestic growth amid low inflation, which averaged 1.7 percent last year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort described January’s inflation as “relatively benign” and forecast it to average 3 percent this year.

“Nevertheless, that could still support monetary easing measures such as cut/s in local policy rates and banks’ reserve requirement ratio (RRR), as part of the policy priorities to boost economic/GDP growth,” Ricafort said.