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Philippine Central Bank Raises Rates for Third Time to 5% to Curb Inflation
MacroDigital Finance
The Philippine central bank (BSP) raised its policy interest rate by 0.25 percentage points to 5% on Thursday, August 27, marking the third consecutive rate hike to control inflation that remains about twice the target, even as the economy expanded only 2.3% in the second quarter, one of the lowest in Southeast Asia. The decision aligned with the expectations of 20 out of 25 economists surveyed by Bloomberg. The rate hike came just hours after the BSP governor told lawmakers that the bank is ready to take measures to bring inflation back to target and may help support the peso, which has weakened nearly 5% since the start of 2026. The BSP expects average inflation to exceed the upper end of its 4% target range both this year and next, before gradually easing to the 3% target by 2028. The Philippine rate hike contrasts with Indonesia and Thailand, which kept rates unchanged at their latest meetings.