BSP Tipped to Hike Rate by Final Quarter Point

The Bangko Sentral ng Pilipinas (BSP) is likely to raise its interest rate by another quarter of a percentage point, bringing it to a total of 5.25%.

This prediction comes from Australia and New Zealand Banking Group Ltd. (ANZ), which says the BSP needs to tighten its monetary policy to combat external pressures stemming from the US Federal Reserve's hawkish stance.

The BSP has already raised its key rate by 75 basis points since April, but ANZ notes that inflation remains above the central bank's target of 3%, and the trade deficit continues to drive dollar outflows.

Meanwhile, Capital Economics' William Jackson cautions against matching the Fed's moves, citing high real interest rates relative to estimates of the neutral interest rate.