Private economists still expect BSP rate hike despite softer May inflation

Private-sector economists anticipate the BSP to raise the key policy rate by at least 25 basis points to 4.75 percent at the June 18 meeting, even as May inflation cooled. The PSA pegged May inflation at 6.8 percent, down from 7.2 percent in April and outside the central bank's forecast range of 7.1 to 7.9 percent. The year-to-date average sits at 4.5 percent, with oil-driven price pressures and sustained elevated food and services inflation. ING Asia-Pacific's Deepali Bhargava argues core inflation remains above target, justifying a measured tightening; Chinabank Research similarly expects a 25-bp hike and foresees no off-cycle move. If de-escalation in the US-Iran conflict stalls, the odds of a larger 50-bp move rise. May's data show transport inflation easing due to domestic fuel rollbacks, yet rice prices continued to climb, contributing to headline inflation and posing policy challenges for the BSP.