The Philippine Statistics Authority reported Tuesday that September CPI hit 7.2 percent, up from 6.1 percent in August and matching this year’s April peak, driven by food and non-alcoholic beverages at 6.7 percent, housing and utilities at 8.4 percent, and transport at 14.6 percent. The nine-month average is now 5.4 percent, well above the BSP’s 2-4 percent target band, and the print has held above target for a seventh straight month. Core inflation picked up to 4.7 percent from 4.1 percent, the fastest in nearly three years. It also exceeded the 6.7 percent median analyst estimate, landing near the top of the BSP’s own 6.4 to 7.4 percent forecast.
The BSP raised its target reverse repurchase rate to 5.00 percent on August 27, its third straight 25bp move and 75bp of tightening since April, explicitly to anchor expectations. Fitch Solutions’ BMI now expects a fourth straight hike in October to 5.25 percent and lifted its end-2026 rate forecast to 5.25 percent from 5.0 percent, saying the August move may have been too preemptive. The Monetary Board meets October 22 and December 17.
Bond markets are already pricing the pain. The 10-year government bond yield sat near 7.66 percent in early October, up from about 7.3 percent in early September; the Bureau of the Treasury made only partial awards in Monday’s T-bill sale as yields kept climbing (91-day at 5.667 percent, 182-day at 5.971 percent), per BusinessWorld. The peso closed Tuesday at P62.77, at successive record lows through the P62 level.