The Monetary Board of the Central Bank of the Philippines raised the target reverse repurchase rate by 25 basis points to 5.0% on Aug. 26, citing broadening price pressures and upside risks from severe El Niño conditions and potential wage adjustments despite easing headline inflation. Over the past year, it cut the rate by 25 basis points in August, October, December and February to 4.25%, held in March, then raised it by 25 basis points in April, June and August. The overnight deposit and lending facility rates rose to 4.5% and 5.5%, respectively. Average headline inflation is projected to breach the 4.0% tolerance ceiling in 2026 and 2027 before settling close to the 3.0% target by 2028. Growth was slow in the first half of 2026 but is expected to strengthen in the second half with fiscal support, while medium-term fundamentals remain intact. Oil prices remain volatile. The Monetary Board said it is prepared to act as warranted to return inflation to target.
2026-08-27Central Bank of the Philippines
Central Bank of the Philippines Raises Policy Rate by 25 Basis Points to 5.0%
The Monetary Board of the Central Bank of the Philippines raised the target reverse repurchase rate by 25 basis points to 5.0% on August 26, citing broadening price pressures and upside risks from severe El Niño conditions and potential wage adjustments. Headline inflation is projected to exceed the 4.0% tolerance ceiling in 2026 and 2027 before approaching the 3.0% target in 2028.