Remolona cites 75 basis points of rate increases in 2026
Bangko Sentral ng Pilipinas (BSP) Governor Eli M Remolona Jr said rates rose three times by 25 basis points in 2026. He addressed the 58th Financial Executives Institute of the Philippines (FINEX) Conference in Manila on October 9, 2026.
Expectations converge toward 3 percent
Remolona said the BSP had raised its policy rate by 75 basis points in 2026 to pursue price stability, which supports sustained growth.
Inflation expectations stood at 5.3 percent over 12 months, 4 percent over 24 months and 3.3 percent over 36 months.
He described their movement toward the 3 percent target as reassuring, while warning that poorly anchored expectations complicate policy.
The BSP surveys market analysts, households and firms.
Decisions also consider scenarios for renewed oil price increases and both benign and severe El Niño conditions.
Remolona contrasted the Philippine target with the 2 percent targets of the United States and other developed economies.
He said low inflation ranks first in well-being surveys among the poorest households.
Oil and dollar rise together
Remolona linked inflation over five years to the 2022 Ukraine shock and the March 2026 Strait of Hormuz closure.
In March, Brent futures and the dollar rose together, while the peso weakened.
Higher oil costs fed into transport, energy, fertilizer and food, with second-round effects on core inflation.
The BSP uses an overnight policy rate and forward guidance to influence yields, investment and consumption through a model of about 88 equations.
Since the 1990s, interest rates have proved more reliable than money-supply control, he said.
Independence means unpopular decisions
Remolona framed central bank independence as protection for decisions that do not please borrowers or currency markets.
He said the public wants low rates, a strong peso and low inflation simultaneously.
The BSP must instead choose policies that serve the economy and preserve credibility.