Market & Mainstreet
One Bank Sees Three More BSP Hikes as Factory Output Jumps 11.8%
The Daily Scan – October 08, 2026 (Thu)
The cost of money looks set to keep rising. One bank now expects three more 25 basis point BSP hikes, which would take the policy rate to 5.75% by early 2027. The Fed minutes and India’s rate hike point the same way.
At home the picture is mixed. Factory output jumped 11.8% in August on electronics, and unemployment eased to 5.3%, though it is still well above last year’s 3.9%. Samsung’s record profit shows how strong AI memory demand is, which helps explain the electronics surge.
For owners, the work today is to price your loans in steps, not one move, and to look for supply chances near electronics plants.
| August factory output | August unemployment | PSEi |
| +11.8% volume, YoY | 5.3%, from 6.0% in July | 5,736.69, down 1.05% |
SECTION 1 · Philippines
● One bank sees three more BSP hikes, taking the rate to 5.75%
WHAT HAPPENED
A Singapore-based bank now expects the BSP to raise its target reverse repurchase rate by 25 basis points at each of its next three meetings through the first quarter of 2027. That would lift the policy rate to 5.50% by end-2026 and 5.75% by the first quarter of 2027, before holding through 2027. The bank cites persistent price pressures, El Niño disruptions, Middle East uncertainty and a more hawkish US Fed. Nomura expects a 25 basis point hike to 5.25% at the October meeting. The BSP has raised the rate by 75 basis points since the Middle East conflict began on Feb 28. Core inflation rose to 4.7% in September from 4.1% in August, the fastest since October 2023.
UNCERTAIN
This is one bank’s forecast, and the bank is not named in the part of the report available to us. Nomura’s call covers October only. The BSP decides on Oct 22 and Dec 17, and the path depends on inflation, oil and El Niño.
WHY IT MATTERS
Our read: loans tied to the policy rate get more expensive in steps. The same bank notes that the Metro Manila minimum wage will rise by P25 to P780 in January 2027, after a P60 rise to P755 in July. That adds to labor costs too.
RISK / OPPORTUNITY
Risk: floating-rate loans and credit lines cost more with each step. Opportunity: owners who fix a rate or pay down debt early may save interest if the forecast proves right. Both are our interpretation, not a forecast from the source.
NEXT MOVE
List your floating-rate loans and work out what each 0.25 point step adds to your yearly interest.
● Factory output jumps 11.8% in August on electronics
WHAT HAPPENED
The PSA says the volume of manufacturing production rose 11.8% in August from a year earlier, up from 6.7% in July. The value of production rose 10.8%. Computer, electronic and optical products led, with volume up 32.1% from 9.2% in July. Transport equipment rose 11.4% and basic metals 29.0%. Average capacity use was 78.7%, slightly below July’s 78.8% but above last August’s 77.6%. BusinessMirror reports year-to-date volume growth of 7.1%.
UNCERTAIN
Growth leans on electronics. The Manila Bulletin reports that 18 of 22 manufacturing divisions grew in volume and four fell. A separate September survey reported by the Inquirer showed factory activity back in contraction, so one month does not settle the trend.
WHY IT MATTERS
Our read: the electronics surge matches the AI hardware demand that lifted Samsung’s profit today. SMEs that supply or serve factories, such as logistics, packaging and maintenance firms, may feel it first.
RISK / OPPORTUNITY
Risk: the gain rests on a narrow base, and it fades if electronics slows. Opportunity: suppliers close to electronics and transport equipment plants. Both are our interpretation.
NEXT MOVE
Ask your factory clients what they expect to buy locally in the fourth quarter.
The Manila Times → , BusinessMirror →, Manila Bulletin →
● Unemployment eases to 5.3% in August, still above last year
WHAT HAPPENED
The PSA says unemployment fell to 5.3% in August from 6.0% in July. About 2.77 million Filipinos were jobless, down from 3.14 million. The employment rate rose to 94.7% from 94.0%, and underemployment eased to 11.9% from 12.9%. Labor force participation was 64.0%. National Statistician Dennis Mapa credited more jobs in sectors such as agriculture. A year earlier, unemployment was 3.9%.
UNCERTAIN
Part of the drop reflects fewer first-time job seekers, 897,000 against 1.5 million in July, according to Rappler’s report on Mapa’s briefing. BusinessMirror quotes economists who expect the pre-holiday lift in hiring to be shaky.
WHY IT MATTERS
Our read: a looser job market can make hiring easier, while weaker household income can slow sales. Both affect SMEs.
RISK / OPPORTUNITY
Risk: higher prices and rising rates while jobs are weaker than last year can squeeze customers. Opportunity: more candidates to choose from for seasonal hiring. Both are our interpretation.
NEXT MOVE
Plan seasonal hiring early and keep contracts short and clear.
● ASEAN energy ministers meet in Manila on fuel security and power grids
WHAT HAPPENED
Energy Secretary Sharon Garin opened the 44th ASEAN Ministers on Energy Meeting in Manila this week, asking regional leaders to turn energy security goals into projects. She said regional energy demand is seen to double its 2022 level by 2050. The agenda includes the ASEAN Power Grid, the ASEAN Framework Agreement on Petroleum Security for coordinated action when fuel supplies are disrupted, and clean energy financing. Garin raised the idea of an ASEAN-led clean energy investment fund. The ministers’ meetings end today, and associated meetings run to Oct 9.
UNCERTAIN
These are plans and proposals. The investment fund is only an idea at this stage, and the petroleum security agreement is still being advanced.
WHY IT MATTERS
Our read: fuel and power are among the largest cost lines for transport, food and manufacturing SMEs. Shared fuel arrangements or a regional grid could, over time, soften supply shocks. Nothing here changes your costs this quarter.
RISK / OPPORTUNITY
Risk: announcements without funding do not lower your bills. Opportunity: the business forum invited investors to build with ASEAN, so energy suppliers and service firms may find new partners. Both are our interpretation.
NEXT MOVE
Watch which proposals turn into funded projects, and which ones touch fuel or power prices in your sector.
SECTION 2 · Worth Knowing
● Samsung posts a record Q3 profit of 107.4 trillion won on AI memory
WHAT HAPPENED
Samsung Electronics said its preliminary third-quarter operating profit rose an estimated 782.5% from a year earlier to a record 107.4 trillion won, about $80 billion. Revenue rose 126.6% to 195 trillion won. Profit was up 20% from the previous quarter. It is the first quarter above 100 trillion won for a South Korean company and the fourth straight record. Samsung will publish detailed results on Oct 29.
UNCERTAIN
Results were mixed against forecasts. Investing.com reports that profit was slightly below Bloomberg’s estimate of 108.67 trillion won but above LSEG’s 106.1 trillion won. A stronger won may also have weighed on results, and Samsung’s smartphone and consumer electronics units face rising component costs.
WHY IT MATTERS
Our read: this is the same AI hardware demand that shows up in Philippine electronics output. It suggests the boom was still strong in the July to September quarter.
RISK / OPPORTUNITY
Risk: heavy dependence on one theme, so a slowdown in AI spending would hit suppliers. Opportunity: firms in the electronics supply chain. Both are our interpretation.
NEXT MOVE
If you sell to electronics makers, ask for their 2027 order outlook before you add capacity.
● Fed minutes show most officials expect another hike by year end
WHAT HAPPENED
Minutes of the Fed’s Sept 15 to 16 meeting show officials voted unanimously for a quarter-point hike, which put the policy rate at 3.75% to 4.00%. CNBC reports that officials expect to raise rates again before the end of the year. Reuters reports they disagreed on whether the hike was mainly a precaution or a shift to much tighter policy. The Fed next decides on Oct 28.
UNCERTAIN
Timing is open. Reuters says investors expect a hold on Oct 28 and a hike on Dec 8 to 9, but some policymakers want faster moves, which could bring dissents.
WHY IT MATTERS
Our read: higher US rates keep pressure on the peso. The bank cited by BusinessMirror points to a more hawkish Fed as one reason it expects more BSP hikes.
RISK / OPPORTUNITY
Risk: a stronger dollar raises the peso cost of imports. Opportunity: exporters and firms that earn in dollars may gain. Both are our interpretation.
NEXT MOVE
If you import inputs, check how much of next quarter’s cost is in dollars and whether you can lock in a rate.
CNBC → , Reuters via Investing.com →
● India raises its policy rate for the first time since 2023
WHAT HAPPENED
The Reserve Bank of India raised its repo rate by 25 basis points to 5.5%, and its policy committee voted unanimously for the move, Business Today reports. The rate had stayed at 5.25% across the last four reviews, after 125 basis points of cuts in 2025.
UNCERTAIN
Whether this is one move or the start of a longer cycle is not settled.
WHY IT MATTERS
Our read: it suggests the BSP is not the only Asian central bank leaning against inflation.
RISK / OPPORTUNITY
Risk: tighter money across Asia can slow growth and demand for exports. Opportunity: lenders and investors are likely to be more careful, which rewards businesses with clean books. Both are our interpretation.
NEXT MOVE
Keep your financial statements current so a lender can see your numbers quickly.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
AI hardware demand is showing up in Philippine factories
Two stories point the same way. Samsung says its quarterly profit passed 100 trillion won on AI memory demand. In the Philippines, PSA data shows electronics output volume up 32.1% in August, the main driver of an 11.8% jump in factory output.
For a small business, the opportunity may sit next to the factory floor. Plants that run harder need transport, packaging, spare parts, maintenance, food service and temporary staff. Average capacity use is 78.7%, which means existing plants can raise output before they need new ones. That is our reading.
The caution is that 18 of 22 manufacturing divisions grew while four fell, and a separate September survey showed contraction. Rates are also rising. Treat this as a lead to follow, not an order book. This section is our interpretation of two news items, not a forecast.
SECTION 4 · FOUNDER’S LESSON
Price your loan in steps, not in one move
Picture a P5 million credit line that moves with the policy rate. Today you pay interest on it each month and barely think about it.
Now take one bank’s forecast of three more quarter-point hikes. If your loan rate moves one for one with the policy rate, each step adds about P12,500 a year in interest on P5 million. Three steps add about P37,500. That is an example, not a prediction, and your own loan terms may differ.
You do not need to believe the forecast. You only need to know what each step would cost you and what you would do about it. Ask your bank how your rate resets. Decide now whether you would pay down the line, fix the rate or adjust prices. A plan made before the hike costs less than a scramble after it.
SECTION 5 · ONE REAL SIGNAL
Core inflation is pulling rates and wages along with it
The signal is in core inflation. It rose to 4.7% in September from 4.1% in August, the fastest since October 2023, according to PSA data cited by BusinessMirror. Nomura reads this as a sign of second-round effects, where higher costs spread into wages and prices beyond food and fuel. It expects a 25 basis point hike in October, to 5.25%.
The same pressure shows up in wages. The bank cited by BusinessMirror notes a further P25 rise in the Metro Manila minimum wage to P780 in January 2027, after a P60 rise to P755 in July. That bank expects three quarter-point hikes, taking the policy rate to 5.75% by early 2027.
Abroad, the direction is the same. The Fed minutes show officials expect another hike before the year ends, and India has just raised its rate. The BSP is not alone, but it faces its own mix of oil prices and El Niño risk.
How to read this: the data points are reported facts. The rate path is a forecast from one bank and one broker. Use it to plan scenarios, not to assume the outcome.
Oct 22 BSP decision. Whether it hikes by 25 basis points, and what it signals for December.
Oct 28 Fed decision. Reuters reports investors expect a hold, with a hike priced for Dec 8 to 9.
The next core inflation print. Whether core keeps climbing beyond 4.7%.
Dec 17 BSP decision. The last BSP meeting of the year.
Summarized in our own words with links to every source. We don’t reproduce full articles or bypass paywalls. Interpretation is labeled as such and kept separate from reported fact.
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