By Katherine K. Chan, Reporter
BENCHMARK interest rates will likely rise further until early 2027 as red-hot inflation warrants further tightening by the Bangko Sentral ng Pilipinas (BSP), according to economists.
In a report, Japanese financial giant Nomura said the BSP may deliver 75 basis points (bps) more in hikes to push the policy rate to 6.25% by February amid accelerating headline and core inflation.
“We pencil in another outsized 50-bp hike at the next Monetary Board meeting in December, taking into account our forecasts of headline CPI (consumer price index) inflation of around 7% in the next two months (which will be released prior to the Monetary Board decision), and core inflation also continuing to pick up, which BSP will likely interpret as second-round effects increasing,” Nomura research analysts Euben Paracuelles and Nabila Amani said.
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