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MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) is likely to embark on a brief and “measured” tightening cycle, analysts said, as policymakers aim to raise interest rates without putting too much strain on the economy’s fragile recovery.
In a note to clients, economists at Nomura Global Markets Research said they now expect the central bank to lift its policy rate by another 75 basis points (bps) this year, to 5.25 percent starting in June, after a global oil shock tied to the Middle East conflict pushed inflation beyond the official target.
Nomura added that the bank could begin reversing those increases next year, forecasting about 75 bps of rate cuts by the second half of 2027, bringing the policy rate down to 4.5 percent.
“We think BSP will take a measured approach, given growth headwinds,” the bank said. “We expect a very short hiking cycle.”
