Report published August 27, 2026
Philippines’ Central Bank Stays Hawkish as Inflation Risks Remain Elevated: ING Report
Source and citation context
- Issuer
- ING
- Report date
- August 27, 2026
- Analysis as of
- Not stated in source
Authors / editors: Deepali Bhargava
Finvaulta summarizes ING's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
The Bangko Sentral ng Pilipinas raised its policy rate by 25bp to 5.0% and signaled a hawkish stance amid upside inflation risks from El Niño and a 12% minimum wage hike. ING expects an additional 25bp rate hike in 4Q26 as inflation is not expected to reach target levels until 2028.
Key Takeaways
- 1.The Bangko Sentral ng Pilipinas (BSP) hiked its policy rate by 25bp to 5.0%, striking a hawkish tone due to persistent upside inflation risks from El Niño and minimum wage hikes.
- 2.BSP upgraded its 2027 inflation forecast to 5.4% and expects inflation to return to target only in 2028 (averaging 3.3%), with headline inflation possibly peaking in 4Q26.
- 3.ING forecasts an additional 25bp rate hike in 4Q26, citing low real policy rates, narrowing US-Philippines yield differentials, and lingering food and wage pressures.
Table of Contents
- The BSP raises rates as expected
- El Niño and wage pressures delay return to inflation target
- Price stability remains BSP's primary objective
- Rate hiking cycle isn't over yet
- Real policy rates at historical lows
- Author
- Disclaimer
Report data
Real policy rates at historical lows
| Metric | Estimate | Context |
|---|---|---|
| BSP Target Reverse Repurchase (RRP) Rate | 5.0% | The BSP raised the target RRP rate by 25bp to 5.0%. |
| BSP 2026 Inflation Forecast | 6.1% | BSP lowered its 2026 inflation forecast from 6.4% on lower oil prices. |
| BSP 2027 Inflation Forecast | 5.4% | BSP raised its 2027 inflation forecast due to minimum wage increases and El Niño risks. |
| BSP 2028 Inflation Forecast | 3.3% | Inflation is forecast to average 3.3% in 2028, returning to target. |
| Minimum Wage Increase | 12% | Recently announced minimum wage increase well above the previous 6% assumption. |
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Authors / Editors
Reported Data Context
- BSP Target Reverse Repurchase (RRP) Rate: 5.0 % (2026-08-27) · Source: Bangko Sentral ng Pilipinas
- BSP 2026 Inflation Forecast: 6.1 % (2026) · Source: Bangko Sentral ng Pilipinas
- BSP 2027 Inflation Forecast: 5.4 % (2027) · Source: Bangko Sentral ng Pilipinas
- BSP 2028 Inflation Forecast: 3.3 % (2028) · Source: Bangko Sentral ng Pilipinas
- Minimum Wage Increase: 12 % (Current)
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