Philippines Macro Brief: May 2025
US-Philippines trade negotiations are ongoing in Washington as we type, with the expectation tariffs will eventually fall into the 10-15% range. Meanwhile, the Bangko Sentral ng Pilipinas’ (BSP) Circular No. 1212 has introduced a sweeping range of changes set to affect FX derivatives, FX speculation, the quantification of FX exposure, options for hedging permanently assigned capital and, potentially, the ability of local banks to provide liquidity to the FX market.
Monetary Policy, Inflation & Interest Rates
As mentioned last month, BSP cut the policy rate by 25bp to 5.50% on 10th April. Further cuts are forecast into 2026, aiming for 4.75% into 2027. Inflation remains within the BSP’s target range of 2-4%, although that may change with the outcome of US-Philippines tariff negotiations (currently on-going – more below). Current forecasts are 3.3-3.7% in 2026.
Tariffs
The US trade deficit with the Philippines was USD4.9Bn in 2024, an increase ...
You must be signed in to read this content. Please enter your user name and password below for access. Want the full Brief? Register free for full access to 16+ countries. Register for free here.