Philippines 10-Year Yield Hits 8-Year High
The Philippines’ 10-year government bond yield climbed to 8.10% in late October, its highest level since October 2018, following the Bangko Sentral ng Pilipinas’ (BSP) larger-than-expected rate hike. The central bank raised its key policy rate by 50 bps to 5.50%, exceeding expectations for a 25 bps increase and marking its fourth consecutive hike this year. The decision came as annual inflation accelerated to 7.2% in September from 6.1% in August, increasing pressure on monetary policy. Higher global oil prices, ongoing Middle East tensions and potential El Niño-related supply disruptions threaten to sustain inflationary pressures, while peso weakness raises the cost of imported goods. Meanwhile, subdued demand at recent government bond auctions added to upward pressure on yields, as investors demanded higher returns to compensate for persistent inflation risks.
The Philippines’ 10-year government bond yield climbed to 8.10% in late October, its highest level since October 2018, following the Bangko Sentral ng Pilipinas’ (BSP) larger-than-expected rate hike. The central bank raised its key policy rate by 50 bps to 5.50%, exceeding expectations for a 25 bps increase and marking its fourth consecutive hike this year. The decision came as annual inflation accelerated to 7.2% in September from 6.1% in August, increasing pressure on monetary policy.
Higher global oil prices, ongoing Middle East tensions and potential El Niño-related supply disruptions threaten to sustain inflationary pressures, while peso weakness raises the cost of imported goods. Meanwhile, subdued demand at recent government bond auctions added to upward pressure on yields, as investors demanded higher returns to compensate for persistent inflation risks.