Arthur Fuentes

The facade of the Bangko Sentral ng Pilipinas, adorned with a new logo featuring a gold-colored, full-bodied Philippine eagle with wings spread upward and stars positioned above,  at the Bangko Sentral Headquarters in Quezon City on February 9, 2024.Maria Tan, ABS-CBN News

Article (news)

Benise Balaoing

ABS-CBN News

MANILA — The Bangko Sentral ng Pilipinas raised interest rates for the first time since October 2023 amid quickening inflation.  The BSP said the Monetary Board decided to hike the benchmark target reverse repurchase ate by 25 basis points to 4.5 percent. This was after inflation in March surged to 4.1 percent, above the central bank’s target range of 2 to 4 percent.  “The interest rates on the overnight deposit and lending facilities were adjusted to 4.0 percent and 5.0 percent, respectively,” the BSP said.Inflation surged in March as fuel prices doubled following the war launched by US and Israel against Iran.  The BSP warned that a worsening Middle East conflict has &quot;deteriorated&quot; the nation&#x27;s inflation outlook and pushed price projections above target for the next two years. The central bank signaled that the regional volatility has triggered a surge in commodity costs that is now filtering into the local economy.  &quot;Higher global oil and fertilizer prices have begun feeding through to domestic fuel and food prices,&quot; the bank said in a statement, adding that rising core inflation indicates a &quot;broadening of underlying price pressures.&quot;New forecasts show average headline inflation breaching the government’s 4 percent ceiling in both 2026 and 2027. More specifically, Deputy Governor Zeno Abenoja said inflation may now pick up to 6.3 percent in 2026 before easing to 4.3 percent in 2027. He further noted that core inflation—which strips out volatile commodities like food and oil prices—“could go near the upper end of the tolerance range for headline inflation.” This shift has stoked fears that inflation expectations could become &quot;de-anchored&quot; from official targets.The BSP said that the Monetary Board opted for a &quot;timely and preemptive policy action&quot; to safeguard the economy. The bank stated the hike is &quot;intended to anchor inflation expectations and contain the buildup of second-round effects,&quot; asserting that the &quot;measured increase&quot; would curb prices without derailing the medium-term economic recovery. BSP Governor Eli Remolona said it’s fairly safe to say that the monetary policy easing cycle is over. “Usually when you do monetary policy, you don&#x27;t think of just one step at a time, you&#x27;re thinking about several steps,” he said. “This is a kind of strategy that minimizes the disruptions to the economy, so once we start raising the policy rate, we&#x27;re likely to raise it again. Still, he said, “We hope there’s not a big enough surprise that forces us to deviate from the usual, the usual process that we take.”The move comes as central banks across Asia struggle to manage the spillover effects of high energy costs and a volatile global supply chain.

The Bangko Sentral ng Pilipinas raised interest rates for the first time since October 2023 amid quickening inflation.

The Bangko Sentral ng Pilipinas raised interest rates for the first time since October 2023 amid quickening inflation.

BSP hikes interest rates amid accelerating inflation

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BSP hikes interest rates amid accelerating inflation

Arthur Fuentes,

Benise Balaoing,

ABS-CBN News

Published April 23, 2026 02:33 PM PHT

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Updated April 23, 2026 04:49 PM PHT

Read More:

BSP

benchmark rate

interest rates

inflation

fuel prices

Eli Remolona

ABSNews

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