BSP seen hiking rates amid higher inflation

BSP Considers Rate Hike Amid Rising Inflation

The Bangko Sentral ng Pilipinas (BSP) may raise its policy rate by a quarte
quarter-point later this month in response to rising inflation concerns. Th
The central bank faces higher risks of demand destruction and inflation, pr
prompting some experts to predict a 25bps rate hike in April.

Consumer price growth reached a 20-month high of 4.1 percent last month, ex
exceeding the BSP's target range of 2.0-4.0 percent. This development is se
set to influence the central bank's decision at its scheduled April 23 poli
policy meeting. BSP Governor Eli Remolona Jr. has hinted that the pause cou
could be extended to allow monetary authorities to further assess the impac
impact of the Middle East war on inflation.

Citi Philippines maintains its call for a 25bps rate hike in April, followe
followed by a pause as the central bank seeks to better understand the full
full extent of the global energy shock's impact on domestic prices. The con
consultancy notes that broadening inflation pressures underscore mounting r
risks to the outlook, particularly as the global energy shock is expected t
to contribute around 2.8 percentage points to inflation in 2026.

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