The Monetary Board of Bangko Sentral ng Pilipinas (BSP) raised the target reverse repurchase rate by 25 bp to 4.50 percent, lifting the overnight deposit and lending facility rates to 4.0 percent and 5.0 percent, respectively, as worsening inflation prospects and rising core pressures—intensified by higher global oil and fertiliser prices stemming from the Middle East conflict—threaten to unanchor expectations. After cutting the policy rate by a cumulative 150 bp between April and December 2025 and holding at 4.25 percent in March 2026, this decision reverses February’s 25 bp easing. BSP’s latest projections show average headline inflation exceeding the 4 percent tolerance ceiling in both 2026 and 2027, while expectations have drifted higher, prompting what the Board described as “timely and pre-emptive” tightening aimed at curbing second-round effects without derailing the ongoing economic recovery. The external shock from surging commodity prices linked to the regional conflict has been the key driver of the deteriorating outlook. The central bank reiterated that future moves will be guided by incoming data and that it stands ready to act further to return inflation to the 3 percent target.
Central Bank of the Philippines 2026-04-22
BSP raises policy rate by 25 bp to 4.50%
Bangko Sentral ng Pilipinas raised the target reverse repurchase rate by 25 bp to 4.50 percent, adjusting overnight deposit and lending facility rates to 4.0 percent and 5.0 percent, respectively, and reversing February’s cut. Citing elevated oil- and fertiliser-driven inflation that is now projected to exceed the 4 percent ceiling through 2027, the Board called the move “timely and pre-emptive” and signalled readiness for further data-dependent tightening.