BSP Holds Rates at 4.25%: What It Means for Home Loan Borrowers

Bangko Sentral ng Pilipinas (BSP) has brought its policy rate down to 4.25% after a series of cuts totaling 225 bps since August 2024, and then decided to hold at that level in a rare off‑cycle meeting in March 2026.

This rate is the benchmark that guides bank lending costs, including housing loans and refinancing packages, so even “small” changes feed directly into monthly amortizations for new and existing borrowers.

In its February 19, 2026 meeting, the Monetary Board cut the target reverse repurchase (RRP) rate by 25 bps to 4.25%, while adjusting the overnight deposit and lending facility rates to 3.75% and 4.75%, respectively, to support an economy still growing slower than hoped.

Trading Economics and other market trackers note that inflation is manageable for now, which gave BSP room to ease, but house views suggest the central bank is likely to keep the policy rate at 4.25% for the rest of the year while monitoring inflation risks.

For property buyers, this creates a window where rates are lower than the 2023–2024 peak but still higher than the ultra‑cheap money era, forcing more careful stress-testing of loan affordability.

For end‑user borrowers comparing bank loans and Pag‑IBIG financing, the current 4.25% policy rate environment means commercial bank housing loan offers may remain relatively stable in the coming months, with limited downside but risk of upside if inflation surprises on the high side.

Investors relying on leverage—such as flippers, rental investors, and those eyeing pre‑selling units with bank financing—must factor these rates into their yield calculations, since even a 25‑bp change can materially affect cash flow and return on equity.

Source: Ziggurat Real Estate