US tariffs impact is becoming clearer, but we encourage you to look past the histrionic headlines and dig into the data – the true impact on the Philippines is likely to be much more muted than some are saying. Inflation crept up in August but remains enviably low. We continue to anticipate a further benchmark rate cut before year end.
Inflation & Interest Rates
After cutting the policy rate to 5.25% in June, as we anticipated the Bangko Sentral ng Pilipinas (BSP) on cut it further on 28th August to 5.00% - the lowest level since November 2022. In August the Central Bank’s governor stated that the benchmark rate was in the “goldilocks zone”, citing stable inflation and demand. See our July report where we forecast this cut, stating it was strongly linked to BSP inflation forecasts. Inflation was easing, hitting 1.4% in June and falling further to 0.9% in July. However, it rose to 1.5% in August, the highest since March and driven by rising prices in food, alcohol, healthcare, and h...
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