{ "id": 19407, "date": "2026-11-03T18:23:26", "date_gmt": "2026-11-03T10:23:26", "guid": { "rendered": "https:\/\/www.ibon.org\/?p=19407" }, "modified": "2026-11-03T18:35:09", "modified_gmt": "2026-11-03T10:35:09", "slug": "bsp-rate-hikes-making-things-worse", "status": "publish", "type": "post", "link": "https:\/\/www.ibon.org\/en\/bsp-rate-hikes-making-things-worse\/", "title": { "rendered": "BSP should explain how their rate hikes aren\u2019t making things worse \u2013 IBON" }, "content": { "rendered": "

Research group IBON questioned how the Bangko Sentral ng Pilipinas<\/em>‘ (BSP) latest 50-basis-point interest rate hike will meaningfully bring down inflation when Filipino households are already struggling with high prices and stagnant incomes.<\/p>\n\n\n\n

IBON executive director Sonny Africa said that the BSP\u2019s demand-tightening move is a misguided response since recent accelerating inflation is mainly due to supply-side pressures from the higher cost of oil and other imports, after the unwarranted US attack on Iran. This is on top of how privatization and deregulation structurally drive up the prices of basic goods and services to support corporate profits.<\/p>\n\n\n\n

The BSP\u2019s interest rate hikes will further weaken household consumption, investment and economic growth without addressing the underlying sources of inflation, said Africa. As it is, aggregate demand is already dampened by rising prices and low incomes. Higher interest rates add to the burden of struggling families and small businesses by raising borrowing costs, squeezing tight budgets, and discouraging spending.<\/p>\n\n\n\n

Given these concerns, the BSP should publicly explain how much of current inflation it sees is driven by excess demand, by rising production and import costs, and by domestic market structures. It should then demonstrate how its rate increases address these different sources of inflation without unnecessarily choking the economy.<\/p>\n\n\n\n

The BSP is hiking interest rates amid dramatically slowing economic growth, job losses, and stagnant family incomes. Philippine gross domestic product slowed to 2.3% in the second quarter of this year, while there were 307,000 less employed in September from the same period last year. The national average nominal minimum wage across the regions is only Php518 or Php800 short of the IBON-estimated Php1,319 needed by a family of five for food and non-food needs as of September.<\/p>\n\n\n\n

The peso\u2019s record-low value\u2014hitting Php64.17 last week\u2014is also making imported goods and production inputs more expensive, adding to the oil price-driven supply shock.<\/p>\n\n\n\n

The effects of higher interest rates on borrowing and investment decisions can be immediate, Africa said, while their broader impact on consumption, employment, incomes, and economic growth will likely become more apparent over the next two to four quarters.<\/p>\n\n\n\n

But with Super El Ni\u00f1o risks and the administration\u2019s inadequate<\/a> support for agriculture, industry, jobs, and people’s purchasing power, Africa warned that the economy could face even greater difficulties in 2027. <\/p>\n\n\n\n

Africa said the government must address the underlying causes of inflation and provide urgently needed and ample support for domestic production, employment, and household incomes, rather than one-sidedly using monetary tightening that further burdens already struggling Filipinos.<\/p>", "protected": false }, "excerpt": { "rendered": "

The BSP\u2019s interest rate hikes will further weaken household consumption, investment and economic growth without addressing the underlying sources of inflation.<\/p>", "protected": false }, "author": 3, "featured_media": 19408, "comment_status": "open", "ping_status": "open", "sticky": false, "template": "", "format": "standard", "meta": { "_acf_changed": false, "_exactmetrics_skip_tracking": false, "footnotes": "" }, "categories": [ 2048, 14 ], "tags": [ 4544, 3365, 4543, 2972 ], "class_list": [ "post-19407", "post", "type-post", "status-publish", "format-standard", "has-post-thumbnail", "hentry", "category-banner", "category-news", "tag-50-basis-point-interest-rate-hike", "tag-bangko-sentral-ng-pilipinas", "tag-bsp-rate-hikes", "tag-marcos-jr-administration", "wpautop" ], "acf": [], "publishpress_future_action": { "enabled": false, "date": "2026-11-10 21:56:25", "action": "change-status", "newStatus": "draft", "terms": [], "taxonomy": "category", "extraData": [] }, "publishpress_future_workflow_manual_trigger": { "enabledWorkflows": [] }, "_links": { "self": [ { "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/posts\/19407", "targetHints": { "allow": [ "GET" ] } } ], "collection": [ { "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/posts" } ], "about": [ { "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/types\/post" } ], "author": [ { "embeddable": true, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/users\/3" } ], "replies": [ { "embeddable": true, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/comments?post=19407" } ], "version-history": [ { "count": 2, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/posts\/19407\/revisions" } ], "predecessor-version": [ { "id": 19410, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/posts\/19407\/revisions\/19410" } ], "wp:featuredmedia": [ { "embeddable": true, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/media\/19408" } ], "wp:attachment": [ { "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/media?parent=19407" } ], "wp:term": [ { "taxonomy": "category", "embeddable": true, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/categories?post=19407" }, { "taxonomy": "post_tag", "embeddable": true, "href": "https:\/\/www.ibon.org\/en\/wp-json\/wp\/v2\/tags?post=19407" } ], "curies": [ { "name": "wp", "href": "https:\/\/api.w.org\/{rel}", "templated": true } ] } }