By Katherine K. Chan, Reporter
The Bangko Sentral ng Pilipinas (BSP) tightened for a third straight meeting on Thursday, but remained measured as it sought to strike a balance between containing lingering price pressures and preventing further growth slowdown.
The Monetary Board raised the target reverse repurchase rate (RRP) by 25 basis points (bps) to 5%, the highest in over a year or since the 5.25% in June 2025. This also matched the benchmark rate set in August 2025.
Rates on the overnight deposit and lending facilities were also lifted by 25 bps each to 4.5% and 5.5%, respectively.
“The measured increases in the policy rate will continue to anchor inflation expectations and mitigate the risk of further second-round effects,” the central bank said in a statement.
“Despite slow growth in the first half of 2026, the fundamentals for growth appear to be intact over the medium term. With the support of fiscal measures, growth is expected to strengthen in the second half of the year.”
This marks the BSP’s third consecutive 25-bp hike, following the first two rounds of tightening in April and June.
This decision was in line with market consensus, as 19 of the 24 analysts polled by BusinessWorld penciled in another hike.
This brought the BSP’s total increases 75 bps since it began its series of monetary policy tightening in April amid inflationary pressures from the Middle East war-driven energy shock.
Inflation eased for the third straight month in July, bringing the year-to-date average to 5%. It was, however, the fifth month in a row that the headline print settled above the BSP’s 3% target.
Meanwhile, the economy slumped to a new post-pandemic low growth of 2.3% in the second quarter, bringing first-half growth to 2.6%.