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Philippine peso supported as BSP raised policy rate to 5.0%

DBS says above-target inflation gives the BSP room for one more measured hike this year, and also notes the peso is the only ASEAN-6 currency weaker in 3Q26 versus the dollar.

Reported · Written up by our desk · EM Currencies

DBS Group Research economists Radhika Rao and Chua Han Teng said the Bangko Sentral ng Pilipinas raised its policy rate by 25 basis points to 5.0% to help anchor inflation expectations and support the Philippine peso.

FXStreet also points out that the peso is the only ASEAN-6 currency that is weaker in 3Q26 against the US dollar, highlighting pressure on the currency relative to peers.

DBS flagged above-target inflation as a key risk, arguing it leaves open the possibility of one additional, measured BSP rate hike during 2026.

The note adds that DBS expects most ASEAN-6 central banks to stay on hold for the rest of 2026, with the Philippines as the sole exception.

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