Philippines: Forecasting an Off-Cycle Rate Hike

Goldman Sachs forecasts an off-cycle 25bp rate hike by the Philippine central bank (BSP) next week due to high inflation and peso weakness. They have increased their total tightening forecast to 100bp, targeting a terminal rate of 5.50% by the end of 2026.

Key Takeaways

• 1.Goldman Sachs expects the Bangko Sentral ng Pilipinas (BSP) to deliver an off-cycle 25bp rate hike next week, likely on May 28th.
• 2.The end-2026 policy rate forecast has been revised upward to 5.50% from an initial forecast of 5.00% (an additional 50bp of tightening).
• 3.Philippine Peso (PHP) weakness, having depreciated 4.7% YTD vs USD, is a significant driver for more aggressive monetary tightening.

Table of Contents

• Bottom line
• Main points
• Disclosure Appendix
• Reg AC
• Disclosures
• Global product; distributing entities
• General disclosures

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial