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The Bangko Sentral ng Pilipinas (BSP) expects inflation in the Philippines to gradually ease over the medium term, although risks to consumer prices remain tilted to the upside, central bank Governor Eli Remolona said on Monday.
Speaking to lawmakers during deliberations on the proposed 2027 national budget, Remolona said the BSP stands ready to take necessary monetary policy measures to bring inflation back within its target range.
Philippine inflation averaged 5% during the first seven months of the year, remaining above the central bank’s target range of 2% to 4%. Persistent price pressures have kept inflation risks elevated and placed the BSP’s monetary policy outlook under close scrutiny.
The BSP Monetary Board is scheduled to hold its next policy review on August 27. The meeting will be closely watched for signals on interest rates and the central bank’s assessment of inflation, economic growth and other factors affecting the Philippine economy.
Remolona’s comments came as the government’s economic team presented its proposed 2027 national budget to lawmakers. The spending plan is valued at 7.2 trillion pesos, equivalent to approximately $116.98 billion, and outlines the government’s fiscal priorities for the coming year.
Finance Minister Frederick Go said the Philippine government plans to borrow around 3.3 trillion pesos, or approximately $53.68 billion, to help finance the proposed budget.
The government’s borrowing requirements and elevated inflation add to the economic considerations facing policymakers as they seek to balance price stability, economic growth and fiscal needs.
While the BSP expects inflation to moderate over time, Remolona emphasized that policymakers remain prepared to respond if price pressures threaten to keep inflation outside the central bank’s target.
Investors and businesses will now turn their attention to the BSP’s August 27 monetary policy meeting for further guidance on the inflation outlook and the direction of Philippine interest rates.
