Economist poll points to BSP rate rise on October 22

A Philippine Star survey found that 12 out of 13 economists anticipate an interest-rate increase when the Bangko Sentral ng Pilipinas Monetary Board meets on October 22. Respondents cited inflation and pressure on the peso among their concerns.

The majority forecast a 25-basis-point rise, taking the benchmark reverse repurchase rate to 5.25 per cent. BPI lead economist Jun Neri and Reyes Tacandong & Co. senior adviser Jonathan Ravelas favour a 50-basis-point increase. Either outcome would be the fourth hike of 2026, following an increase to five per cent in August.

September headline inflation reached 7.2 per cent, compared with 6.1 per cent in August, exceeding the central bank’s two to four per cent target. Core inflation also quickened, reaching 4.7 per cent.

HSBC senior ASEAN economist Aris Dacanay expects a quarter-point increase despite weak domestic demand. He said El Niño could intensify inflation risks, with HSBC forecasting average inflation of 7.3 per cent for the fourth quarter.

Neri said the peso’s decline beyond 63 against the dollar supported further tightening in October and December. A move towards 64 could prompt a half-point increase at the October meeting, he said.

Economists differed over the outlook beyond October. Chinabank chief economist Domini Velasquez said an October hike could conclude the tightening cycle as economic weakness gains importance. Dacanay, Ravelas and several others saw room for another increase before year-end.

John Paolo Rivera was the sole respondent predicting no October change. He also expects a December hold, while acknowledging that persistent inflation, further currency weakness or stronger second-round price pressures could warrant a 25-basis-point rise.