Capital Economics: The Philippine Central Bank's tightening cycle has limited room to maneuver.

Capital Economics stated in a report that the Philippine central bank has limited room for further interest rate hikes and is likely to reverse course next year. Following a slowdown in growth in the first quarter, the Philippines' economic recovery could be slow, partly due to the initial impact of global energy shocks. With rising energy prices, inflation has surged significantly in recent months. Currently, Capital Economics expects the Philippine central bank to raise interest rates by at least another 25 basis points to 5.00%, as the bank is focusing on 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 soon, and could potentially start cutting rates from early 2027.