Standard Chartered Bank economists Jonathan Koh and Edward Lee now anticipate that the Bangko Sentral ng Pilipinas (BSP) will raise its policy rate by 25 basis points to 5.25% in October, revising their earlier forecast which had expected the central bank to hold rates steady [1]. This adjustment is attributed to a combination of factors, including broader inflation in September, a rebound in oil prices, and further depreciation of the Philippine Peso (PHP) [1].
The economists also noted that the US Federal Reserve's rate hike in September, along with additional tightening by other central banks, supports the case for another measured increase by the BSP, despite ongoing softness in economic growth [1]. As a result, Standard Chartered has raised its end-2026 policy rate forecast for the BSP to 5.25% from the previous 5.00% [1].
Looking ahead, Standard Chartered expects the BSP to begin easing monetary policy once inflation returns to the target range, which they project will occur in the third quarter of 2027 [1].
CONCLUSION
Standard Chartered's revised outlook signals expectations for one final BSP rate hike in October, driven by persistent inflationary pressures and currency weakness. The bank foresees policy easing only after inflation stabilizes, likely not until Q3-2027, suggesting a prolonged period of tight monetary conditions.