The Bangko Sentral ng Pilipinas (BSP) on Friday said the inflation outcome in June kept to its forecast range of 1.1 percent to 1.9 percent, reinforcing expectations of subdued price pressures for the rest of the year. The central bank projects full-year inflation to stay below the lower bound of its 2 percent to 4 percent target, primarily driven by the sustained easing of rice prices.
However, the BSP flagged upside risks from the recent surge in global oil prices, which could partially offset gains from food price stability. Still, the central bank maintained a generally dovish tone, with inflation seen returning to within the target band in 2026 and 2027.
“On balance, a more accommodative monetary policy stance is warranted,” the BSP said, noting that global economic activity is slowing amid persistent uncertainty surrounding U.S. trade policy and ongoing geopolitical tensions in the Middle East. These external headwinds could weigh on domestic growth prospects, further supporting the case for policy easing.
Despite emerging risks, the BSP emphasized its commitment to safeguarding price stability. Policymakers will continue to monitor external developments and assess the lagged effects of past policy adjustments to ensure monetary settings remain conducive to sustainable growth and employment.
The medium-term inflation outlook suggests room for policy flexibility, though vigilance remains crucial given the complex external landscape.
