Bangko Sentral ng Pilipinas Raises Interest Rate to 5 Percent
The central bank's quarter-point hike move matched economists' expectations, and the national currency, the peso, recouped its losses following the decision.
Bangko Sentral ng Pilipinas raised its target reverse repurchase interest rate by a quarter point to the 5 percent level.
Interest Rate Raised by a Quarter Point
Bangko Sentral ng Pilipinas raised its target reverse repurchase interest rate by a quarter point to the 5 percent level. This decision was in full alignment with the expectations of economists surveyed by Bloomberg News.
Statements by Governor Remolona
The interest rate decision was announced a few hours after BSP Governor Eli Remolona's speech to lawmakers. Remolona had emphasized that the central bank was ready to take action to fulfill its inflation target.
Expectations for the Peso and Inflation
The rate hike is expected to provide some support for the peso, which has lost approximately 5 percent of its value in 2026. Immediately following the decision, the peso managed to recover its losses.
The central bank projects that average inflation will exceed the 4 percent tolerance ceiling this year and next year. Inflation is then expected to stabilize close to the 3 percent target by 2028.