Manila, Oct. 13 -- Following the 25-basis-point reduction in the Bangko Sentral ng Pilipinas' (BSP) key rates last week, a Fitch Solutions Company unit forecasts an additional cut in December, and more in 2026, to support the domestic economy.

With the rate reduction last Oct. 9, the BSP's target reverse repurchase (RRP) rate is now at 4.75 percent, reduced by a total of 175 basis points since 2024, with the 100 basis points in the first nine months of this year alone.

"We maintain our forecast of 50 bps (basis points) in cuts in 2026 with inflation remaining soft," BMI said in a report sent to journalists Monday.

A lower interest rates make borrowing costs cheaper, thus encouraging lending, which in turn boosts economic activity and d...