Benise Balaoing

The facade of the Bangko Sentral ng Pilipinas on February 15, 2024. Jonathan Cellona, ABS-CBN News

Article (news)

Bangko Sentral ng Pilipinas

ABS-CBN News

MANILA (UPDATE) &mdash; The Bangko Sentral ng Pilipinas (BSP) hiked interest rates anew as Philippine inflation remained high.The BSP said the Monetary Board decided to hike the benchmark target reverse repurchase rate by 25 basis points to 4.75 percent. May inflation eased to 6.8 percent from 7.2 percent in April, but this number is still one of the highest inflation rates in recent years.&nbsp;&ldquo;Inflationary pressures remain strong,&rdquo; the BSP said in its statement. &ldquo;Global oil and fertilizer prices remain elevated and continue to drive domestic fuel and food prices. Rising core inflation indicates broadening price pressures and second-round effects.&rdquo;&nbsp;The central bank also raised rates in its April meeting--the firs time it did so since October 2023--after inflation rates surged beyond its target range of 2 to 4 percent. &nbsp;&nbsp;The BSP said it now sees inflation climbing to 6.4 percent in 2026, and will fall back to the 2-4 percent target range at 3.1 percent only by 2028.&nbsp;&ldquo;We were hit by a very unusual global supply shock, and as you know, more persistent than most people anticipated,&rdquo; BSP Governor Eli Remolona said.&nbsp;&ldquo;Now with the ceasefire apparently being signed, we&rsquo;re still not sure of what will happen. Even if the Strait of Hormuz is opened today&hellip;we will still need several months to rebuild the infrastructure before we can expect the price of oil to return to the levels before the conflict,&rdquo; he explained.&nbsp;Asked if the Bangko Sentral is expected to tighten policy rates more this year, Remolona said, &ldquo;It depends; analyzing this is somewhat challenging for any central bank.&rdquo;&nbsp;Remolona, however, added that he hopes hiking policy rates will help boost growth in the country.&ldquo;We&rsquo;re hoping it will help somewhat, you know, a sense of stability I think is important for consumption and investment,&rdquo; he said. &ldquo;Growth has been disappointingly slow in the last few quarters, so we think that by not being too aggressive, we can maybe help the economy a little bit, or help restore the economy a little bit.&rdquo;The growth rate of the Philippine economy <a href="https://www.abs-cbn.com/news/business/2026/5/7/gdp-growth-skids-to-2-8-percent-in-first-quarter-of-2026-1007" rel="noopener noreferrer" target="_blank">skidded</a> to 2.8 percent in the first quarter, because of the lingering effects of the flood control controversy and the impact of the war in the Middle East, which sent oil prices surging. In 2025, the Philippine economy only grew by 4.4 percent&mdash;its <a href="https://www.abs-cbn.com/news/business/2026/1/29/philippines-gdp-fourth-quarter-2025-below-target-1012" rel="noopener noreferrer" target="_blank">worst growth rate</a> in 11 years, outside of the pandemic recession.

The Bangko Sentral ng Pilipinas (BSP) raised interest rates anew as Philippine inflation remained high.

The Bangko Sentral ng Pilipinas (BSP) raised interest rates anew as Philippine inflation remained high.

BSP hikes benchmark rate amid high inflation

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BSP hikes benchmark rate amid high inflation

Benise Balaoing,

ABS-CBN News

Published June 18, 2026 02:45 PM PHT

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Updated June 18, 2026 04:44 PM PHT

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