Rate Hikes Unlikely for Now Despite Oil Shock, MUFG Says - BusinessWorld Online

Rate hikes unlikely for now despite oil shock, MUFG says - BusinessWorld Online

By Katherine K. Chan, Reporter THE BANGKO SENTRAL ng Pilipinas (BSP) is unlikely to hike rates in the near term even as oil price shocks due to the ongoing war in the Middle East are expected to weigh on inflation and the peso, MUFG Global Markets Research said. “Will BSP hike rates if the crisis worsens and oil prices spike further? We think the answer is likely “no” right now, but the key distinction is whether this is a temporary supply-side …

Oil-driven inflation complicates rate path – MUFG

MUFG’s Senior Currency Analyst Michael Wan assesses how higher Oil prices and a prolonged Strait of Hormuz closure could affect Bangko Sentral ng Pilipinas policy. Their base case still assumes two more cuts to 3.75% in 2026 as Oil falls to US$70/bbl, but sustained Oil at US$90–100/bbl would push inflation above the BSP’s 4% ceiling in 2026 and likely 2027, raising risks of a policy rethink. Inflation risks versus growth headwinds “Will BSP hike…