{
  "id": 17436625,
  "title": "Economists see more interest rate hikes as inflation risks persist",
  "url": "https://urgent.news/2026/10/31/economists-see-more-interest-rate-hikes-as-inflation-risks-persist",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-31T16:00:00.000Z",
  "source": {
    "name": "Philippine Star Business",
    "slug": "philippine-star-business",
    "url": "https://www.philstar.com/business/2026/11/01/2566962/economists-see-more-interest-rate-hikes-inflation-risks-persist"
  },
  "original_language": "en",
  "account": "Manila, Philippines — Philippine central bank officials are anticipated to hike interest rates once more in December, with some economists predicting additional tightening measures early in 2027 due to inflation's endurance, soaring oil costs, and peso devaluation persistently putting price stability at risk. Citi, Oxford Economics, Security Bank, and Chinabank Research analysts all foresee another rate increase, with the Monetary Board's substantial 50-basis-point hike last week, which propelled the benchmark rate to 5.50 percent, intensifying the likelihood. While Citi and Oxford Economics foresee a 25-basis-point rise in December, their perspectives for 2027 differ. Citi anticipates the policy rate to reach 6 percent by February 2027, Oxford Economics believes the BSP will keep rates unchanged after December, and Chinabank suggests potential delays in monetary easing until late 2027 or early 2028. The BSP's benchmark rate regulates borrowing costs nationwide, with higher rates aimed at curbing demand and preventing inflation from becoming entrenched. This fourth consecutive rate hike in 2026 amassed 125 basis points in cumulative increases as authorities aimed to curb broadening price pressures and avert further inflation expectations. Citi asserted the BSP's aggressive tightening stemmed from mounting concerns over inflation's persistence, especially as soaring fuel prices influence transport, food distribution, and other goods and services. The bank recommends at least a 25-basis-point hike in December, followed by another 25-basis-point hike in February 2027, potentially reaching a 6 percent policy rate by early 2027. However, it warns the rate could soar to 6.25 percent if the peso depreciates more sharply, possibly necessitating an additional 50-basis-point increase in December. Oxford Economics expects another 25-basis-point hike in December, driven by amplified food and energy prices generating stronger second-round effects on wages, transport fares, and other services. Assistant economist Jun Hao Ng expects inflation to average 5.9 percent this year and 4.5 percent in 2027, with the peso's depreciation further bolstering the case for continued monetary tightening. Security Bank chief economist Angelo Taningco also anticipates a 25-basis-point increase at the Monetary Board's December 17 meeting, raising the policy rate to 5.75 percent. Taningco attributes the central bank's larger-than-expected October adjustment to containing accelerating inflation and rapid peso depreciation. Security Bank now anticipates the reserve requirement ratio (RRR) to remain at 5 percent instead of being reduced by 200 basis points as previously expected. The RRR represents the portion of deposits banks must hold as reserves rather than lend out. Chinabank also predicts another rate hike in December, but the prospect of further tightening hinges on forthcoming inflation and economic growth data. However, Chinabank warns monetary policy may be less effective in addressing supply-driven inflation caused by El Niño, transport fare adjustments, and higher food prices. It also highlights that government spending adjustments have been more moderate than initially anticipated, and the extent to which government spending could bolster domestic economic activity in the second half of 2026 remains uncertain.",
  "summary": "Economists expect the Bangko Sentral ng Pilipinas to raise interest rates again in December, with some seeing further tightening in early 2027 as persistent inflation, elevated oil prices and peso depreciation continue to threaten price stability.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}