THE BANGKO Sentral ng Pilipinas (BSP) could raise benchmark borrowing costs by up to 50 basis points (bps) this year as the oil price shock from the Iran war worsens inflation expectations.
Last week, the central bank ended its easing cycle as it hiked the key policy rate by 25 bps to 4.5% and signaled more rate hikes could follow to safeguard spiraling prices due to the Iran war.
“We think BSP is likely to continue with its monetary policy tightening, and would choose to act sooner rather than later, especially as it had already forecast above-target inflation for two years over 2026 to 2027,” Deutsche Bank Research said in a note.
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