Kaitou Macro: The Philippine central bank has limited room for interest rate hikes, and may start cutting rates next year

Kaitou Macro stated that the Philippine central bank has limited room for a rate hike cycle and expects a policy reversal next year. The Philippines experienced a slowdown in growth in the first quarter, with slow economic recovery and a significant surge in inflation due to rising energy prices. Kaitou Macro predicts that the Philippine central bank will raise interest rates by at least 25 basis points to 5.00%, and may then shift to a wait-and-see approach, with interest rate cuts starting from early 2027.