At its monetary policy meeting Thursday, the Monetary Board decided to raise the BSP’s Target Reverse Repurchase (RRP) rate by 25 basis points to 4.75 percent.

The interest rates on the overnight deposit and lending facilities were adjusted to 4.25 percent and 5.25 percent, respectively.

Inflationary pressures remain strong. Global oil and fertilizer prices remain elevated and continue to drive domestic fuel and food prices. Rising core inflation indicates broadening price pressures and second-round effects, including higher inflation expectations.

Latest BSP projections indicate a higher inflation path. Average headline inflation is seen to breach the 4.0-percent tolerance ceiling in both 2026 and 2027. For 2028, inflation is seen to settle slightly above the 3.0-percent target.

On balance, the Monetary Board decided that monetary policy tightening is warranted. Today’s policy action will help keep inflation expectations anchored and mitigate the risk of second-round effects. The measured monetary policy action will also complement fiscal measures in supporting steady consumption and strengthening business sentiment.

The Monetary Board will continue to be guided by incoming data and is prepared to take further monetary action as needed to ensure that inflation returns to the 3.0-percent target. Bangko Sentral ng Pilipinas