BSP hikes rates anew amid inflation risks

MANILA, Philippines — Monetary authorities raised key policy rates again by a quarter-point on Thursday, citing upside risks to inflation from volatile oil prices, severe El Niño conditions and potential wage adjustments.

The hike raised the Bangko Sentral ng Pilipinas’ (BSP) benchmark rate to 5 percent. The rates on its overnight deposit and lending facilities were raised to 4.5 percent and 5.5 percent, respectively.

The Monetary Board said these price risks required preemptive monetary action, noting that average headline inflation is still seen breaching the 4-percent tolerance ceiling in 2026 and 2027. It added that inflation is expected to decline and settle close to the 3-percent target by 2028.