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Philippines: Policy Rate Held At 5.75% (Consensus 5.5%) in Feb-25

• The BSP held its key rate at 5.75%, contradicting market expectations of a 25bp cut, citing persistent global economic uncertainties and a stable inflation outlook.
• Inflation risks for 2025 and 2026 are balanced, though upside pressures from utilities and downside risks from lower rice tariffs remain.
• The BSP signalled a cautious, data-dependent approach to easing, with future rate cuts contingent on further clarity regarding inflation trends and global economic developments.

Philippines Policy Rate 6.25% (consensus 6.5%) in Aug-24

• The BSP's decision to cut the policy rate by 25 basis points to 6.25% defied consensus expectations. This strategic shift towards a less restrictive monetary policy responds to an improved inflation outlook.
• Domestic demand remains solid, and the economic environment is favourable, with strong GDP growth and declining unemployment.
• Future policy decisions will focus on balancing inflation risks with economic growth, with the BSP remaining vigilant and ready to adjust its stance based on evolving macroeconomic indicators.

Philippines Policy Rate 6.5% (consensus 6.5%) in Jun-24

• The BSP's decision to maintain the policy rate at 6.5% aligns with consensus forecasts. It reflects confidence in managing downside inflation risks despite ongoing pressures from higher food, transport, and electricity prices.
• Favourable domestic growth prospects, supported by a strong labour market and robust net exports, allow the BSP to hold steady on monetary policy while remaining cautious about potential external spillovers.
• Anticipated easing of price pressures in the year's second half could provide scope for a less restrictive policy stance. Still, the BSP remains vigilant, ready to adjust settings to maintain price stability and support sustainable economic growth.

Philippines CPI Inflation 3.9% y-o-y (consensus 4.0%) in May-24

- Philippine CPI inflation in May 2024 reached 3.9% y-o-y, the highest since Nov-23, yet slightly below the 4.0% consensus and below the historic average, indicating moderated inflationary pressures.
- Despite the rising headline rate, core inflation slowed to 3.1%. PPI inflation also contracted by -0.77% in April 2024, suggesting reduced upstream cost pressures may temper future CPI inflation increases.