The Monetary Board has raised the Bangko Sentral ng Pilipinas (BSP) Target Reverse Repurchase (RRP) Rate by 25 basis points to 4.75 percent as inflationary pressures remain elevated.
The interest rates on the overnight deposit and lending facilities were likewise adjusted to 4.25 percent and 5.25 percent, respectively.
The BSP’s decision comes amid sustained pressure from elevated global oil and fertilizer prices, which continue to drive domestic fuel and food costs higher. A rising core inflation rate also points to broadening price pressures and stronger second-round effects, including elevated inflation expectations.
Based on the latest BSP projections, the country faces a higher inflation path, with average headline inflation expected to exceed the 4 percent tolerance ceiling in both 2026 and 2027, before easing slightly but remaining above the 3 percent target in 2028.
On balance, the Monetary Board said monetary policy tightening is warranted to help anchor inflation expectations and mitigate emerging risks. The adjustment is also intended to complement government fiscal measures aimed at sustaining consumption and strengthening business sentiment.
Moving forward, the Monetary Board said it will remain guided by incoming data and is prepared to take further policy action as necessary to ensure inflation returns to its 3 percent target over the medium term.