Capital Economics stated in a report that the Bangko Sentral ng Pilipinas has limited room for further interest rate hikes, and is very likely to reverse course next year.

After a slowdown in growth in the first quarter, the economic recovery of the Philippines may be very gradual, partly due to the initial impact of the global energy shock. Amid rising energy prices, inflation has also surged significantly in recent months. Currently, Capital Economics expects the Philippines central bank to raise interest rates by at least another 25 basis points to 5.00%, as the bank is monitoring the threat posed by high inflation. However, concerns about the weakness of the Philippine economy may prompt the central bank to adopt a wait-and-see approach in the near future, and it may begin cutting interest rates from early 2027.