The Bangko Sentral ng Pilipinas (BSP) slashed its policy rate by 25 basis points (bps) to 5.5 percent from 5.75 percent on Thursday due to easing prices of rice and many other commodities amid weaker global demand.

However, the policymaking Monetary Board sees inflationary risks from transport, utility, and meat prices.

Due to projected manageable inflation, BSP said it is considering further reduction in its policy rate by "baby steps" or 25 bps this year .

Thus, the BSP lowered its average inflation for this year at 3.2 percent from 3.5 percent and to 2.3 percent from 3.5 percent for next year. For 2027, the BSP estimates an average 3.2 percent growth.