The Bangko Sentral ng Pilipinas (BSP) raised its key policy interest rate by 25 basis points to 4.75 percent during the Monetary Board’s meeting on Thursday, June 18, 2026, as it seeks to curb rising inflation.
The central bank also increased the rates on its overnight deposit and lending facilities to 4.25 percent and 5.25 percent, respectively.
In a statement, the BSP said inflationary pressures remain strong, driven by elevated global oil and fertilizer prices that continue to push up domestic fuel and food costs. It added that rising core inflation suggests broader price pressures and the risk of higher inflation expectations.
Latest BSP forecasts show inflation could exceed the government’s two to four percent target range in both 2026 and 2027. Inflation is also projected to remain slightly above the three-percent target in 2028.
Given the higher inflation outlook, the Monetary Board said further monetary tightening was necessary to help keep inflation expectations in check and prevent second-round effects, such as higher wages and transport costs.
The BSP said the rate increase would complement government measures aimed at supporting consumer spending and business confidence.
The central bank added that it will continue to monitor incoming economic data and stands ready to take further policy action if needed to bring inflation back to its three-percent target.
