BMI Sees Bangko Sentral ng Pilipinas Raising Rates by 25 bps More

Business | BANKING Posted on 2026-04-27 00:49:11

MANILA — BMI expects the Bangko Sentral ng Pilipinas (BSP) to implement another 25-basis-point increase in policy rates this year, citing persistent inflation risks.

In a report released Friday, BMI said the central bank has adopted a more hawkish stance and is likely to raise rates to 4.75 percent, possibly during its June policy meeting. This follows the Monetary Board’s recent decision to increase rates by 25 basis points amid rising inflation concerns.

The BSP earlier warned that inflation could exceed government targets for both 2026 and 2027, driven largely by higher oil prices linked to tensions in the Middle East. These increases are expected to push up transportation and food costs.

BMI projects headline inflation to remain above 4 percent in the coming months, averaging around 4.3 percent for the year. Inflation already climbed to 4.1 percent in March from 2.4 percent in February, mainly due to rising transport and food prices.

The report also noted that, unlike some regional peers, the Philippines tends to pass on higher energy costs more quickly to consumers due to limited fiscal capacity for subsidies or price controls. Fuel prices have already surged significantly since the onset of the conflict.

BMI said a timely rate hike could help anchor inflation expectations and prevent broader price pressures from becoming entrenched. However, it expects the BSP to pause further tightening after June, as the economy faces a more fragile growth outlook.

NPO News Team | PNA - PR

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