The Bangko Sentral ng Pilipinas raised its target reverse repurchase rate by half a percentage point to 5.5% on Oct. 22, 2026, Bloomberg reported in The Straits Times. Only one of 25 economists in a Bloomberg News survey expected an increase that large; the other 24 expected a quarter-point hike.
Consumer prices rose 7.2% in September from a year earlier, bringing the year-to-date inflation average to 5.4%, above the central bank’s 3% target. The peso hit a fresh historic low on Oct. 22 after breaching 63 per U.S. dollar for the first time the previous week. Peso weakness risks adding to inflation because the country imports fuel and food.
According to Bloomberg’s account, the BSP said broadening price pressures and upside risks to inflation required a “strong” response. It said the move would help contain second-round effects and anchor inflation expectations. Governor Eli Remolona told a news briefing, “There was a bit of a sense of urgency to try and dampen these inflationary pressures.” The BSP kept its 2026 inflation forecast at 6.1% and raised its 2027 forecast to 6% from 5.4%.
The BSP said it stood ready to take further action as necessary to return inflation to target. But Pantheon Macroeconomics’ Miguel Chanco said another hike at the December meeting was not a done deal.
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