THE Philippine central bank’s decision to cut its benchmark interest rate by 25 basis points is expected to provide much-needed support to the country’s property market, which continues to face lingering post-pandemic challenges, according to property consultancy Colliers Philippines.
The Bangko Sentral ng Pilipinas lowered the overnight reverse repurchase rate to 5.25 percent from 5.5 percent on Thursday, June 19, 2025, amid cooling inflation and signs of a global economic slowdown.
The move comes as the Philippine economy grew by a slower-than-expected 5.4 percent in the first quarter, falling short of the government’s six percent to seven percent annual growth target.
To hit the lower end of the target, the economy needs to grow by an average of 6.2 percent in the next three quarters, according to the Department of Economy, Planning and Development (formerly the National Economic and Development Authority).
Colliers said the rate cut is a positive signal for the real estate sector, particularly for the Metro Manila pre-selling condominium market, which has yet to fully recover from the pandemic. “We believe an accelerated economic expansion for the rest of the year, supported by a more accommodative monetary policy, will benefit residential take-up,” said Joey Bondoc, research director at Colliers Philippines.
While the full effects of the BSP’s easing have yet to materialize, Colliers noted early signs of improvement across property segments.
Lower interest rates are expected to spur demand for horizontal residential developments—such as house-and-lot and lot-only units—in growth corridors outside Metro Manila.
The commercial sector may also benefit as lower borrowing costs support the expansion of small and medium-sized enterprises (SMEs), which could drive additional demand for office space.
Meanwhile, the retail segment continues to show strong momentum, with mall operators reporting foot traffic and revenues surpassing pre-pandemic levels. This consumer rebound is spilling over to the hospitality sector, where domestic tourism and staycation demand are helping offset weaker international arrivals.
Colliers said continued monetary easing, along with targeted fiscal support, could help unlock more robust property sector activity and broaden the recovery in the second half of 2025. / KOC