August 2022 Updates: Further policy tightening expected

With the July 2022 inflation rate of 6.4%, the highest since October 2018, higher inflation expectations are prompting further tightening of policy rates as signaled by the Bangko Sentral ng Pilipinas (BSP) in their recent statements.

Considering further rate hikes on the horizon to support the peso and given heightened inflation expectations, along with the recently released 7.4% GDP growth for the second quarter, we have revised our forecasts:

For more information, please download our full report here.