MANILA: The Philippine central bank is considering “strong monetary action” at its meeting next month to tame inflation and foreign exchange volatility, its governor said on Friday, signaling a third interest rate rise this year.
Inflation rose to 5.2 percent in July, the highest level in more than five years and above the central bank’s 2-4 percent target rate. It is expected to quicken in July to 5.3 percent due to higher food, fuel and utility costs, Department of Finance Chief Economist Gil Beltran said.
At the same time, the peso is hovering near a 12-year low against the dollar and is one of the worst performing currencies in Asia.
“The Monetary Board is considering strong monetary action to deal with persistent elevated inflation risks as well as our concern on the volatility in the foreign exchange market,” Bangko Sentral ng Pilipinas Governor Nestor Espenilla told a media briefing.
The central bank’s next scheduled meeting is on August 9, the same day that the government is due to release second-quarter GDP figures and two days after July inflation data is scheduled for publication.
Espenilla said the peso’s weakness is contributing to higher inflation expectations and “developments that may disanchor those expectations warrant a strong response.”
The currency has weakened in recent years as US interest rates started to rise and more recently as global trade tensions mounted.
The BSP raised interest rates last month for the second time in six weeks, becoming the second central bank regionally after Indonesia’s to deliver two increases in a short period of time.
Like other Asian economies with external deficits, the Philippines faces pressure to follow the US Federal Reserve in shifting away from low interest rate settings or risk capital flight as investors seek higher-yielding assets
The Philippines’ key rate, after two hikes of 25 basis points each, is 3.50 percent.
HSBC Economist Noelan Arbis said in a market note he expects the central bank to respond more forcefully next month, with a 50-basis points rate increase to tame inflation.
Philippine central bank considering ‘strong monetary action’ to tame price pressures
Philippine central bank considering ‘strong monetary action’ to tame price pressures
Gulf-EU value chain integration signals shift toward long-term economic partnership: GCC secretary general
RIYADH: Value chains between the Gulf and Europe are poised to become deeper and more resilient as economic ties shift beyond traditional trade toward long-term industrial and investment integration, according to the secretary general of the Gulf Cooperation Council.
Speaking on the sidelines of the World Governments Summit 2026 in Dubai, Jasem Al-Budaiwi said Gulf-European economic relations are shifting from simple commodity trade toward the joint development of sustainable value chains, reflecting a more strategic and lasting partnership.
His remarks were made during a dialogue session titled “The next investment and trade race,” held with Luigi Di Maio, the EU’s special representative for external affairs.
Al-Budaiwi said relations between the GCC and the EU are among the bloc’s most established partnerships, built on decades of institutional collaboration that began with the signing of the 1988 cooperation agreement.
He noted that the deal laid a solid foundation for political and economic dialogue and opened broad avenues for collaboration in trade, investment, and energy, as well as development and education.
The secretary general added that the partnership has undergone a qualitative shift in recent years, particularly following the adoption of the joint action program for the 2022–2027 period and the convening of the Gulf–European summit in Brussels.
Subsequent ministerial meetings, he said, have focused on implementing agreed outcomes, enhancing trade and investment cooperation, improving market access, and supporting supply chains and sustainable development.
According to Al-Budaiwi, merchandise trade between the two sides has reached around $197 billion, positioning the EU as one of the GCC’s most important trading partners.
He also pointed to the continued growth of European foreign direct investment into Gulf countries, which he said reflects the depth of economic interdependence and rising confidence in the Gulf business environment.
Looking ahead, Al-Budaiwi emphasized that the economic transformation across GCC states, driven by ambitious national visions, is creating broad opportunities for expanded cooperation with Europe.
He highlighted clean energy, green hydrogen, and digital transformation, as well as artificial intelligence, smart infrastructure, and cybersecurity, as priority areas for future partnership.
He added that the success of Gulf-European cooperation should not be measured solely by trade volumes or investment flows, but by its ability to evolve into an integrated model based on trust, risk-sharing, and the joint creation of economic value, contributing to stability and growth in the global economy.
GCC–EU plans to build shared value chains look well-timed as trade policy volatility rises.
In recent weeks, Washington’s renewed push over Greenland has been tied to tariff threats against European countries, prompting the EU to keep a €93 billion ($109.7 billion) retaliation package on standby.
At the same time, tighter US sanctions on Iran are increasing compliance risks for energy and shipping-related finance. Meanwhile, the World Trade Organization and UNCTAD warn that higher tariffs and ongoing uncertainty could weaken trade and investment across both regions in 2026.
