BSP easing cycle now losing steam

Foreign banks are adopting a more hawkish outlook on Philippine monetary policy, with some analysts now forecasting that the central bank will hold interest rates steady through 2026 to combat persistent inflationary pressures.

- By DERCO ROSAL

Singapore-based Oversea-Chinese Banking Corp. Ltd. (OCBC) expects the Bangko Sentral ng Pilipinas (BSP) to keep the current benchmark rate untouched through the year, partly due to near-term risks to price movements.

Inflation averaged 1.7 percent in 2025 after price hikes surged to a nine-month high in December 2025. This prompted OCBC to raise its inflation forecast to an average of 2.5 percent in 2026, consistent with rising inflation expectations over the next 12 months.