The Central Bank of the Philippines’ Monetary Board raised its target reverse repurchase rate by 50 basis points to 5.50%, citing broadening price pressures and further upside inflation risks, after cutting the rate to 4.25% in February and raising it in quarter-point steps in April, June and August. Overnight deposit and lending facility rates were adjusted to 5.00% and 6.00%, respectively. Headline inflation is expected to accelerate in the coming months, remain high in 2027 and approach the 3.0% target in 2028, while core inflation is projected to rise further. Domestic economic activity is expected to recover with fiscal support. Higher transport fares have materialized as an upside inflation risk, while El Niño continues to threaten agricultural production and prices. Renewed tensions in the Middle East have pushed global oil prices higher. The central bank said the increase would make monetary policy appropriately restrictive to contain second-round effects and anchor inflation expectations, and signalled readiness to take further action to ensure inflation returns to target.
Central Bank of the Philippines Raises Policy Rate by 50 Basis Points to 5.50%
The Central Bank of the Philippines’ Monetary Board raised its target reverse repurchase rate by 50 basis points to 5.50%, citing broadening price pressures and upside inflation risks. Overnight deposit and lending facility rates were adjusted to 5.00% and 6.00%, respectively, with headline inflation expected to remain high in 2027 and approach the 3.0% target in 2028.