By Bilyonaryo staff
The Bangko Sentral ng Pilipinas (BSP) raised its benchmark interest rate by 25 basis points to 5.00% on Thursday, its third straight hike, as inflation is expected to remain above target through 2027.
The move brings cumulative tightening since April to 75 basis points. Rates on the overnight deposit and lending facilities rose to 4.50% and 5.50%, respectively.
The BSP cited volatile oil prices, El Niño-related agricultural risks and potential wage increases as inflation risks that warranted “preemptive monetary action” to contain broader price pressures.
Headline inflation is expected to remain above the BSP’s 2.0%-4.0% target in 2026 and 2027 before settling near 3.0% in 2028.
Despite weaker economic growth in the first half, the BSP expects activity to pick up in the second half and signaled it was prepared to tighten policy further if needed.—Bilyonaryo.com
