BSP tracks Mideast war impact on Phl

The Bangko Sentral ng Pilipinas (BSP) said it is closely monitoring the impact of the escalating Middle East war on inflation and the broader economy as it prepares for its April 23 policy meeting.

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“Ahead of the monetary-policy meeting on April 23, 2026, the BSP is closely monitoring the impact of the Middle East conflict on Philippine inflation and the economy,” the central bank said in a statement on Wednesday.

“The BSP is assessing the potential impact of higher oil prices on the price of fertilizer, transport fares, and inflation in general,” it added, noting that price stability continues to be its primary mandate.

On Tuesday, BSP Governor Eli M. Remolona, Jr. met with President Ferdinand R. Marcos, Jr. to discuss the Monetary Board’s policy decision during its first policy review this year in February.

Finance Secretary and Monetary Board member Frederick D. Go said on Tuesday that the Board will consider hiking rates next month if oil prices stay elevated.

At the same time, the central bank said it continues to intervene in the foreign exchange market to smoothen out sharp swings and temper inflationary risks as the ongoing war weighs on the peso.

“This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level,” it said.

This came after the local unit slumped to an all-time low of P59.87 against the greenback on Monday, down 13.50 centavos to break its previous record-low finish of P59.735 on Friday.

'DEFENSIVE RATE HIKE'

Meanwhile, Oxford Economics said the BSP will likely reverse its policy path this year as rising oil prices are expected to stoke inflation.