ASEAN

Research evidence excerpt

ASEAN

eiterate our forecast for a further 25bp

Figure 1: Thailand - Core and core-core inflation

BI hike this month, with risks skewed towards additional

%oya

tightening given still-elevated FX pressures. 3.5

3.0 Core-core

June inflation again undershot expectations in both the Philip- 2.5 Core

2.0pines and Thailand, largely reflecting lower oil prices. As a

1.5

result, we are lowering our CPI forecasts for both countries. 1.0

We have also lowered our BSP terminal rate forecast to 5.5% 0.5

(from 6.0%). While we continue to expect an extended hold 0.0

-0.5by the BOT through 2026, we see the risk of hikes in 2027

Jun-14 Jun-17 Jun-20 Jun-23 Jun-26

due to stronger growth. Notably, this week’s escalation in the Source: CEIC, J.P. Morgan.

Middle East conflict underscores the elevated uncertainty Note: Our core-core inflation excludes food, rent, utilities and public transport.

around the oil price outlook and that inflation risks could per-

sist into 2H26.

Philippines: More hikes still on the table

BNM: Maintaining our 4Q26 hike forecast Headline inflation moderated from 6.8%oya in May to

6.4%oya in June, mostly on lower transport fuel and rice pric-

As we had expected, BNM left its policy rate unchanged at es. Following recent negative revisions to our Brent oil price

2.75% and turned more optimistic on growth. The central forecasts, we have also lowered 2026/27 headline CPI esti-

bank expressed relief about the de-escalation in the Middle mates from 6.3/5.1% to 5.6/4.3%, with the return to the target

East, citing stronger-than-expected exports that also broad- range brought forward from end-2027 to mid-2027 (Figure

ened beyond tech products. Nevertheless, the BNM retained 2). El Niño poses the key upside risk to our inflation outlook.