Further BSP hikes seen despite tepid economy

The Bangko Sentral ng Pilipinas (BSP) will likely raise interest rates further to combat rising inflation, though a still-weak economy may prevent aggressive action, according to a report by Singapore's United Overseas Bank Ltd. (UOB). The forecast was reported by BusinessWorld .

In its quarterly global outlook, UOB Global Economics & Markets Research said it expects two more 25-basis-point rate hikes, including one in June. The bank noted that inflationary pressures remain elevated, necessitating further monetary tightening to keep prices in check.

However, the sluggish performance of the Philippine economy could limit the BSP's ability to act aggressively. UOB's assessment highlights the delicate balance policymakers face between controlling inflation and supporting economic growth.