Standard Chartered analysts Jonathan Koh and Edward Lee have revised their outlook for the Bangko Sentral ng Pilipinas (BSP), now expecting the central bank to keep its policy rate unchanged at the upcoming 27 August meeting. This marks a shift from their previous forecast, which anticipated a 25 basis point hike at that meeting [1]. The analysts also maintain their expectation for BSP to implement 25 basis points of rate cuts in both the second and third quarters of 2027, contingent on inflation moderating to below 4% in the second quarter of that year [1].
As a result of softer-than-expected economic growth in the first half of the year, Standard Chartered has lowered its 2026 GDP growth forecast for the Philippines to 3.5%, down from the prior estimate of 4.0% [1]. The bank has also revised its 2026 Consumer Price Index (CPI) inflation forecast downward to 5.9%, compared to the previous 6.5%, citing lower-than-expected inflation data so far [1].
Despite the shift in rate expectations, Standard Chartered expects BSP's rhetoric to remain hawkish in the near term [1]. The bank has also adjusted its end-2026 and end-2027 policy rate forecasts to 4.75% and 4.25%, respectively, both 25 basis points lower than previous projections [1].
No immediate market reaction or analyst commentary on market implications was provided in the source article.
CONCLUSION
Standard Chartered's revised outlook signals a more cautious stance on Philippine monetary policy, with no rate hike expected in August and lower growth and inflation forecasts for 2026. The expectation of eventual rate cuts in 2027 hinges on inflation falling below 4%. BSP is anticipated to maintain a hawkish tone despite these adjustments.