Philippines: BSP hikes policy rate by 25bp in June: Hawkish stance remains; Maintain 6.0% terminal rate estimate with downside bias

Research evidence excerpt

Philippines: BSP hikes policy rate by 25bp in June: Hawkish stance remains; Maintain 6.0% terminal rate estimate with downside bias

J P M O R G A N Asia Pacific Economic Research

18 June 2026

Philippines: BSP hikes policy rate

by 25bp in June

Hawkish stance remains; Maintain 6.0% terminal rate

estimate with downside bias

The BSP raised the policy rate by 25bp, from 4.50% to 4.75% during the Monetary Emerging Markets Asia, Economic

Board (MB) meeting today, in line with JPM and consensus expectations (7 out of and Policy Research

30 economists in Bloomberg survey expected a 50bp hike). Interest rates for Jin Tik Ngai

overnight deposit and lending facilities were also raised to 4.25% and 5.25% (65) 6807 5556

accordingly. jintik.ngai@jpmorgan.com

JPMorgan Chase Bank, N.A., Singapore Branch

Slight upward revision to CPI forecasts; hawkish stance

remains

The tone of the MB statement and the analyst briefing are very much in line with

our expectations. Despite the recent easing in Middle East tensions courtesy of the

interim US-Iran agreement, the BSP expects inflationary pressures to remain

strong, driven by elevated fuel and food costs, broadening price pressures, and

rising inflation expectations. The 2026/27 headline inflation forecast was lifted

marginally from 6.3/4.3% to 6.4/4.5%, while the new 2028 inflation forecast of

3.1% was also penciled in at slightly above the 2-4% target range.

The BSP’s previous inflation forecast during the April meeting was based on an oil

price assumption of US$83/77pbl in 2026/27. The minor upward CPI revisions

today imply little change to their oil assumptions, which is consistent with the latest

futures market pricing (2026/27: US$83/74pbl). The El Niño factor is not part of

the baseline forecast but remains a significant upside risk.