2026.10.2206:37:09UTC+00Philippine Central Bank Hikes Interest Rate to 5.5%

The Bangko Sentral ng Pilipinas (BSP) raised its benchmark interest rate by 50 basis points to 5.50% at its October 2026 meeting—its fourth consecutive hike and a larger move than markets had anticipated—as it aimed to contain renewed inflationary pressures and shore up the peso, which had fallen to a record low. Headline inflation accelerated to 7.2% in September and is projected to stay elevated through 2027 before gradually converging toward the BSP’s 3.0% target in 2028. Core inflation is likewise expected to climb further, underscoring persistent underlying price pressures.

The central bank warned that inflation risks are intensifying, with renewed tensions in the Middle East driving global oil prices higher and increases in transportation fares adding to cost pressures. In addition, El Niño conditions pose a threat to agricultural output. Even so, domestic economic activity is expected to strengthen, supported by ongoing fiscal measures.