Philippines raises rates by half a point to curb inflation

The Philippine central bank raised its policy rate by 50 basis points to 5.50 percent, twice the increase expected by all 27 economists in a Reuters poll. Its fourth consecutive rise targets widening price pressures and inflation expectations. The bank raised next year’s inflation forecast to 6 percent, while Governor Eli Remolona left open the possibility of further increases.

Economics & Markets·October 22, 2026·Evening

20:38 UTC

The increase doubles the expected step

The Philippine central bank raised its policy rate by 50 basis points to 5.50 percent on October 22, its fourth consecutive increase. The step was larger than analysts expected. It followed renewed inflation pressure in the country.^{[1], [2]}

All 27 economists in the Reuters poll had expected a 25-basis-point rise. The bank said decisive action was needed to contain broadening price pressures, second-round effects and inflation expectations. Governor Eli Remolona left open further increases if necessary.^[1]

Next year’s inflation forecast rises to 6 percent

The central bank kept its inflation forecast for this year at 6.1 percent and raised next year’s projection from 5.4 percent to 6 percent. It expects 3.3 percent in the following year. Inflation accelerated in September after four months of slowing. These projections accompanied the larger rate increase as policymakers sought to limit persistent price pressures.^[1]

Currency pressure accompanies weak first-half growth

The peso initially strengthened after the announcement, then reversed toward record lows. The decision came alongside weak growth in the first half of the year. Remolona said he expected fiscal spending to recover. The bank’s stated readiness to raise rates again remained conditional on the need for further action.^[1]

The increase doubles the expected step

Next year’s inflation forecast rises to 6 percent

Currency pressure accompanies weak first-half growth

References

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