Published at 5:00 PM PHT,
by
Dennis Cabrera
Pre- BSP Hike: Strategy
Strategies before the pre-June 2026 rate hike
Wise management of working fund
Strategically designed for your MSME resilience during the Energy Crisis.
1 Bangko Sentral ng Pilipinas (BSP) hiked interest rate by 25 bps to 4.5% ⇑ last , (see also: Monetary Board raises Target RRP Rate by 25 basis points)
After the reported 7.2% headline inflation, the BSP will now focus on core inflation for its policy rate adjustments. The next scheduled meeting of the BSP is this coming . A policy rate hike is a necessary move to bring inflation down or keep inflation expectations anchored. (see also: 1 & 2 Citation at References section)
2 USD:PHP exchange rate , Friday
- Peso depreciates
- , USD 1.00 : PHP 61.684 ⇓, Php 0.192 lower in value than
- , USD 1.00 : PHP 61.492 ⇓, Php 0.949 lower in value than
- , USD 1.00 : PHP 60.543
- for real time data (see also: BSP.gov.ph)
3 Mixed fuel prices: ⇑⇓
- Fuel price adjustments for
- Diesel Php ~2.90 - Php 3.20/liter, increase ⇑
- Gasoline Php ~1.00 - Php 1.40/liter, increase ⇑
- Kerosene Php ~1.50 - Php 1.70/liter, decrease ⇓
- Data from Fuel Price Update Philippines
- to follow soon: Primary data from DOE.gov.ph
4a PSEi on , Friday, 3:00 p.m. PHT:
- PSEi | down (-38.26 pts) at 5,976.77 ⇓ | - 0.64%
- All shares | down (-22.16 pts) at 3,371.41 ⇓ | - 0.65%
- Financials | down (-43.96 pts) at 1,798.47 ⇓ | - 2.39%
- Industrial | up (+.52 pts) at 8,770.02 ⇑ | + 0.006%
- Holding Firms | down (-105.31 pts) at 4,419.09 ⇓ | - 2.33%
- Property | down (-2.2 pts) at 1,929.89 ⇓ | - 0.11%
- Services | up (+47.11 pts) at 3,010.43 ⇑ | + 1.59%
- Mining & Oil | down (-472.03 pts) at 18,256.04 ⇓ | - 2.52%
4b PSEi on , Monday, 3:00 p.m. PHT:
- PSEi | down (-35.25 pts) at 5,941.52 ⇓ | - 0.59%
- All shares | down (-17.28 pts) at 3,354.13 ⇓ | - 0.51%
- Financials | down (-18.75 pts) at 1,779.72 ⇓ | - 1.04%
- Industrial | down (-44.33 pts) at 8,725.69 ⇓ | - 0.51%
- Holding Firms | down (-32.45 pts) at 4,386.64 ⇓ | - .73%
- Property | up (+3.61 pts) at 1,933.50 ⇑ | + 0.19%
- Services | down (-14.24 pts) at 2,996.19 ⇓ | - 0.47%
- Mining & Oil | down (-626.71 pts) at 17,629.33 ⇓ | - 3.43%
- Financials, holdings, industrials, services, & mining/oil fell due to its sensitivity to rates, fuel costs, and growth slowdown. Property (+ 0.19%) gained because real estate often benefits from higher rents/prices amid inflation.
- see also: PSE Composite and Sector Indices for real time data
5 Inflation outlook (ref. Grok AI summary, , 9:44 a.m. PHT):
- , actual: 4.1% ⇑ (up from 2.4% in )
- The average inflation rate for Q1 2026 is 2.8% (see also: Philippines Headline Inflation)
- BSP latest forecast, reported by Rappler.com (after rate hike): approx. average of 6.3% for , 4.3% for (higher than 2% - 4% target) see also: Economic Outlook, BSP Report
- Other estimates: 3.9% - 5.5% for
- In , core inflation increased to a two-year high of 3.9% from 3.2% in and 2.2% last year, . The BSP told BusinessWorld that they are now focusing on core inflation rather than headline inflation to guide their monetary policy decisions. (see also: 7 Citation at References section for difference between headline inflation and core inflation)
- actual headline inflation is 7.2%, (see also: PSA Summary Inflation Report, )
6. The Debt-to-GDP Ratio is 65.2% (with a buffer of 34.8%). Although the total outstanding debt of the Philippines is Php 18.49 trillion as of end-, which is a 21-year high, and is projected to hit Php 19.06 trillion by end-, it remains manageable as the economy scales to Php 31.8 trillion. Also, that debt remains even smaller than the nation's total economic output, when GNI (Gross National Income) is used. (GNI includes remittances of OFWs).
(see also: 4 & 6 Citation at References section)
7 Additional financial data:
- Consumer confidence: reduced pessimism from - 22.2% (Q4 2025) to - 15.8% (Q1 2026); + 1.8% forecast of Quarter ahead, + 9.6% of Year-ahead
- Remittances trends: $35.63B (2025, full-year), $5.81B (early 2026, Jan-Feb); resilient at ~ 3.0% growth
- Credit availability/NPLs: as of , PH Banks NPL ratio is stable at 3.3%; there is strong credit demand from households and enterprises amidst inflation pressures
- Labor force survey: as of , unemployment rate eased to 5.0% (from 5.1% in with 2.58 million jobless); employment rate at 95%
- Philippine GDP for January-March Q1 2026 growth slowed to 2.8%, trailing its regional peers (see also: 5 Citation at References section)
- The Department of Economy, Planning, and Development (DEPDev) is implementing the UPLIFT (Unified Package for Livelihoods, Industry, Food, and Transport) program, to cushion soaring prices (see also: UPLIFT microsite for statistics on "ensuring sufficient food supply" and "keeping food prices within reach")
8 Proxy indicators to regularly monitor for actual inflation:
- Fuel prices: Diesel & Gasoline costs, up; Kerosene cost, down
- PHP currency performance: Weak at Php 61.684 vs USD 1.0 (import cost pressure)
- Food (esp. rice): Persistent high prices (~ 13.7% Year-over-Year in April); PH government imposing price caps
Three concrete defensive moves MSMEs must act on
1 Apply AI tools to manage well funds from loans, apply it to working funds to make MSME operations earn in resilient mode, and anticipate inflation trends before policy rates are hiked this
2 Continue monitoring fuel price adjustments to hedge against the oscillating fuel price threat and to hurdle other rising operating costs that weaken profit margins and equity
3 After headline 7.2% inflation, monitor regularly proxy indicators to hedge against the actual inflation rate this
Your Loan Mgt, Operations to Earn, Holds & Cautions Flywheel
Engineered for Professional & MSME Business Strategies
The Strategy: With headline inflation rate at
7.2% and a possible BSP policy rate hike this coming , make systems thinking moves: manage loans well to earn in operations, hedge against fuel and other operating expenses, and manage working fund with holds and cautions.
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