Philippines central bank lifts policy rate to 6.75% to rein in inflation surge
According to Nikkei Asia, Bangko Sentral ng Pilipinas raised its policy rate by 25 basis points to 6.75%. The move follows May consumer inflation accelerating to 5.2%, above the central bank's target band. The peso firmed against the dollar after the decision.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona told reporters in Manila the risk of inflation becoming "persistently above target" was "pronounced". He said a further 25 basis-point increase remains on the table if needed. The decision was not unanimous; two of the seven Monetary Board members voted to keep rates on hold.
Food, transport and services were the main drivers of May's inflation reading. While crude prices have eased since the US-Iran agreement, the Philippines' imported energy costs remain elevated. Finance Secretary Ralph Recto said the fiscal consolidation plan remains on track.
The peso strengthened 0.4% against the dollar, closing at 57.8. The Bankers Association of the Philippines said credit growth could slow in the second half. ANZ and HSBC strategists have added another 25-basis-point hike to their 2026 base case.
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