<\/p>\n
By Katherine K. Chan, <\/b>Reporter <\/i><\/p>\n
THE Bangko Sentral ng Pilipinas\u2019 (BSP) easing cycle has likely ended, with rate hikes now on the table as energy shocks amid the Middle East war could <\/span>stoke inflation this 12 months, the <\/span>ASEAN+3 Macroeconomic <\/span>Re<\/span>search <\/span>Of<\/span>f<\/span>ice<\/span> (AMRO) said.<\/span><\/p>\n In its latest Regional Economic Outlook for 2026, AMRO said it sees the country\u2019s consumer price index (CPI) picking as much as 3.9% this 12 months if oil prices hold around $80-$90 per barrel.<\/span><\/p>\n This is quicker than its previous 3.2% estimate and the 1.7% inflation print in 2025.<\/p>\n By next 12 months, AMRO sees inflation cooling to three.6%.<\/p>\n If realized, the CPI would settle near the upper end of the central bank\u2019s 2%-4% goal for 2 straight years.<\/p>\n AMRO Chief Economist Dong He noted that the Philippines\u2019 heavy reliance on imported oil from the Middle East makes it vulnerable to cost and provide shocks.<\/p>\n \u201cThe Philippines is one in all the more affected countries within the region,\u201d he told BusinessWorld<\/i> in an e-mail interview. \u201cAs a net oil and gas importer, with 98% of its oil imports sourced from the Middle East, the Philippines is exposed to higher oil prices and potential supply disruptions.\u201d<\/p>\n For now, Mr. He said the BSP may adopt a \u201cwait-and-see\u201d approach while assessing the duration of the oil supply shocks. <\/span><\/p>\n \u201cThe policy advice is absolutely to probably wait and see, and see how long the shock would last. I believe it\u2019s the persistence of the shock that matters,\u201d he said at a press briefing on Monday. \u201cIf the persistence is longer than expected, then in fact, and we see continued inflationary pressures, the central bank may have to react since it has an inflation goal range of 1% plus and minus across the 3% goal.\u201d<\/p>\n Asked if he still sees room for further easing, Mr. He said: \u201cWe don\u2019t see space for cutting rates for the time being because we see upside risks to inflation within the Philippines.\u201d<\/p>\n He noted that the central bank may consider monetary policy tightening if inflation breaches the BSP\u2019s goal band for a chronic period.<\/p>\n \u201cIf it goes out of the range, then there could also be a have to review, particularly if the shock is predicted to last more, after which the central bank may have to tighten, and that\u2019s the frame<\/span>work that\u2019s in place,\u201d Mr. He said. <\/span><\/p>\n Last month, the BSP kept its benchmark rate unchanged at 4.25% in an off-cycle meeting to calm markets frightened over uncertainties arising from the US-Iran war.<\/p>\n Its next regular policy meeting is scheduled for April 23.<\/p>\n BSP Governor Eli M. Remolona, Jr. said the Monetary Board arrived at the choice after noting that the present price pressures are supply-driven, and mountain climbing rates immediately risk derailing the country\u2019s economic recovery.<\/p>\n He added that future monetary policy decisions will consider second-round price effects, particularly a possible uptick in transport fares, food and fertilizer prices, electricity rates and wages.<\/p>\n Mr. He said the central bank must \u201crespond decisively\u201d once such second-round effects materialize.<\/p>\n Nevertheless, Mr. He told BusinessWorld<\/i> that the BSP should be cautious in adjusting its monetary policy because the country\u2019s growth momentum stays weak.<\/p>\n \u201cGiven heightened uncertainty, the authorities should remain vigilant and stand able to recalibrate policy parameters to mitigate the impact of external shocks,\u201d he added. \u201cSpecifically, amid rapidly evolving geopolitical tensions, volatile energy prices, and weaker growth momentum, the BSP should remain cautious in making <\/span>monetary policy adjustments.\u201d<\/p>\n AMRO expects the Philippine economy to expand by 5.3% this 12 months, though noted that subdued domestic demand and energy shocks poses risks to its growth outlook.<\/p>\n \u201cMeanwhile, enhanced coordination between fiscal and monetary authorities is required to cushion the impact of supply-driven inflation and forestall antagonistic effects on growth,\u201d Mr. He added. \u201cOn this regard, the federal government could consider timely administrative measures, equivalent to targeted subsidies to highly exposed sectors and <\/span>reducing tariffs on energy imports.\u201d<\/p>\n AMRO Group Head and Lead Economist Allen Ng also noted that monetary and monetary authorities should prioritize stopping the supply-driven oil shocks from worsening further.<\/p>\n \u201cI believe the important thing point that we wanted to spotlight is the indisputable fact that, on this environment, the policy priority is absolutely to stop a supply-driven shock from becoming broader and more persistent,\u201d Mr. Ng said in the course of the briefing. <\/span><\/p>\n \u201cWhich means staying alert for second-round effects, with monetary policy remaining cautious, and monetary policy focused on timely, well-targeted support for essentially the most exposed sectors and households,\u201d he added.<\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" People shop inside a food market in Ermita, Manila. \u2014 PHILIPPINE STAR\/RYAN BALDEMOR By Katherine K. Chan, Reporter THE Bangko Sentral ng Pilipinas\u2019 (BSP) easing cycle has likely ended, with rate hikes now on the table as energy shocks amid the Middle East war could stoke inflation this 12 months, the ASEAN+3 Macroeconomic Research Office […]<\/p>\n","protected":false},"author":1,"featured_media":314696,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[22441,28724,17106,19250,17105],"class_list":["post-314695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-amro","tag-breaches","tag-bsp","tag-hike","tag-inflation"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/comments?post=314695"}],"version-history":[{"count":2,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314695\/revisions"}],"predecessor-version":[{"id":314698,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314695\/revisions\/314698"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media\/314696"}],"wp:attachment":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media?parent=314695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/categories?post=314695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/tags?post=314695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}