THE Bangko Sentral ng Pilipinas (BSP) is expected to chart its own policy course, with ANZ seeing a rate hike next week, despite uncertainty over the US Federal Reserve’s next moves and potential market signals from a Jackson Hole symposium.
“Whether Fed Chair Kevin Warsh offers near-term guidance on US interest rate at Jackson Hole is unlikely to alter our Asia rate profile,” ANZ Research said in a commentary on Friday.
“We expect Bank of Korea and Bangko Sentral ng Pilipinas to raise policy rate,” it added.
ANZ expects the BSP to increase its target reverse repurchase (RRP) rate by a quarter-point to 5.0 percent from 4.75 percent at its monetary policy meeting on Aug. 27, despite a weak domestic growth backdrop.
The Fed’s annual Jackson Hole symposium, meanwhile, will be held from Aug. 27 to 29.
“We think this year’s Jackson Hole event is a key event risk rather than a platform to signal imminent monetary policy changes,” ANZ said.
“We think any market impact is more likely to come from interpretation of speeches rather than explicit policy guidance, with its impact on Asia seen as limited in the near term.”
For the Philippines, the research unit expects domestic inflation concerns to outweigh uncertainty surrounding the Fed's near-term policy direction.
The BSP’s policymaking Monetary Board has so far raised key policy rates twice this year to tame inflation, with the benchmark rate currently at 4.75 percent.
Philippine headline inflation, meanwhile, has slowed for the last three months but the July rate of 6.2 percent is still well above the BSP’s 3.0- to 4.0-percent target.
“As a result, the BSP is likely to maintain its hawkish stance in the meeting, despite weak growth,” ANZ said.
Economic growth was lower than expected at 2.3 percent in the second quarter, the weakest expansion since the Covid-19 pandemic and markedly under the government’s downwardly-revised 3.5- to 4.5-percent goal for 2026.
ANZ's latest forecast put Philippine growth at 3.9 percent this year, slowing from the 4.4 percent recorded in 2025, before recovering to 5.0 percent in 2027 and 5.5 percent in 2028.
Its inflation forecast for the Philippines stands at 6.2 percent for 2026, 4.8 percent in 2027 and 4.1 percent in 2028.
ANZ said the prolonged conflict in the Middle East had pushed energy prices higher and created additional inflationary pressures across Asia.
It identified the Philippines, India and Indonesia as among the region’s major energy importers that were particularly sensitive to energy inflation and currency volatility.
Higher oil prices can put pressure on inflation by increasing transportation and production costs, while a weaker peso can amplify the domestic cost of imported energy and other goods.
The combination of energy-price risks, food inflation and currency volatility provides an additional reason for the BSP to maintain a hawkish stance, ANZ said, even if the Fed does not provide a clear signal for higher US interest rates.
