Market & Mainstreet
The BSP Goes Big, the Peso Still Slides
The Daily Scan – October 23, 2026 (Fri)
The BSP surprised markets with a half-point hike to 5.5 percent, and the peso still fell to a new low of 63.52. Manufacturers have promised to hold prices on 204 basic goods until year-end, and ecozone investments have already passed this year’s target. Abroad, AI stocks sold off again, oil passed $111 on reports of possible new strikes on Iran, and the US Federal Reserve meets next week. The message for business owners: borrowing just got more expensive, so protect your cash and margins before chasing growth.
| Peso close | BSP rate | 2027 inflation forecast | Brent |
| ₱63.52/$ | 5.50% |
6.0% |
$111+ |
SECTION 1 · Philippines
● BSP surprises with a half-point hike to 5.5%
WHAT HAPPENED
The BSP raised its policy rate by 50 basis points to 5.5 percent on Thursday, its fourth hike this year and 125 basis points in total since April, the Inquirer reported on Oct. 23. Only 2 of the 20 economists in the Inquirer’s poll saw it coming. The BSP raised its 2027 inflation forecast to 6 percent from 5.4 percent and sees 6.1 percent this year. Governor Eli Remolona Jr. said policy is restrictive but it is unclear whether it is restrictive enough, and admitted the BSP was “kind of” behind the curve.
UNCERTAIN
Whether more hikes are coming. The BSP says it is open to more. Pantheon Macroeconomics’ Miguel Chanco said a hike at the Dec. 17 meeting is not guaranteed, since this move may have pulled it forward, and Capital Economics’ Jason Tuvey said the cycle may now be over.
WHY IT MATTERS
A bigger hike than expected means banks will likely reprice loans faster. Customers with debt will also feel squeezed, which can slow how quickly they pay you.
RISK / OPPORTUNITY
Risk: higher interest on credit lines and variable-rate loans, and slower-paying customers.
NEXT MOVE
Call your bank this week to ask when your variable-rate loans reprice and by how much. Then follow up on any unpaid invoices more than 30 days old.
● Peso still falls to a record 63.52 after the hike
WHAT HAPPENED
The peso closed Thursday at 63.52 per dollar, 15.9 centavos weaker than the previous record of 63.361, The Manila Times reported on Oct. 23. It traded between 63.30 and 63.545. The peso has now lost P4.73, about 8 percent, since the end of 2025. Remolona said the hike was not meant to defend the peso and that the BSP only steps in lightly to smooth sharp swings. The PSEi fell 0.72 percent to 5,779.73, ending a five-day rally.
UNCERTAIN
Whether the hike helps at all. Chinabank’s Domini Velasquez said higher rates alone may not be enough, and a lasting recovery depends more on local confidence and growth. A trader said US market conditions could cancel out the effect.
WHY IT MATTERS
A bigger hike didn’t stop the slide, so don’t count on the peso recovering soon. Anything you buy in dollars keeps getting more expensive.
RISK / OPPORTUNITY
Risk: continued rise in import, fuel and software costs. Opportunity: exporters and freelancers paid in dollars earn more pesos.
NEXT MOVE
Put a validity date on every quote you send, such as 7 or 15 days, so a weaker peso doesn’t eat your margin on jobs with imported costs.
● Manufacturers promise no price hikes on 204 basic goods until year-end
WHAT HAPPENED
Manufacturers have committed to keep prices of the 204 basic necessities and prime commodities on the DTI’s monitoring list unchanged until Dec. 31, Context.ph reported on Oct. 23. Trade Secretary Cristina Roque said the assurance came after talks on rising fuel and operating costs. She also said manufacturers have enough stock through the holidays and urged consumers not to hoard.
UNCERTAIN
Noche Buena products are not covered yet, and the DTI still has to meet manufacturers on those. The freeze is a voluntary commitment, not a binding rule, so it depends on manufacturers keeping their word while their own costs rise.
WHY IT MATTERS
Retailers can’t pass cost increases through on these items for the rest of the year, while their own power, rent and transport costs keep climbing. Margins on basic goods will get thinner.
RISK / OPPORTUNITY
Risk: squeezed margins for groceries and sari-sari stores. Opportunity: stable shelf prices can keep customers coming back during the holidays.
NEXT MOVE
If you run a store, buy your Noche Buena stock early, before any price agreement or increase on those items is announced.
● Ecozone investments hit P310 billion, beating the 2026 target early
WHAT HAPPENED
PEZA approved P310 billion in investments from January to October, already above its P300 billion full-year target and up 77 percent from a year earlier, The Philippine Star reported on Oct. 23. That puts it close to the 2012 record of P311.9 billion. The 240 projects are expected to generate $9.12 billion in exports and 38,815 direct jobs. Taiwan was the top source, followed by the Netherlands, South Korea, Singapore and Indonesia.
UNCERTAIN
How much turns into actual operations. These are approvals, not money spent. October alone brought in P12.49 billion, down 40 percent from a year earlier, and PEZA chief Tereso Panga said the priority is turning commitments into working operations.
WHY IT MATTERS
New factories and offices in ecozones need food service, transport, staffing, maintenance, and IT and marketing support from local businesses.
RISK / OPPORTUNITY
Opportunity: supply and service contracts with new ecozone locators. Risk: some approved projects may be delayed by rising costs.
NEXT MOVE
If you offer business services, find out which new locators are moving into the ecozone nearest you and contact their admin or procurement teams.
SECTION 2 · Worth Knowing
● Tech stocks drop as Meta falls 7% and AI spending worries return
WHAT HAPPENED
The Nasdaq fell 2.6 percent and the S&P 500 dropped 1.21 percent on Thursday, while the Dow ended flat, Yahoo Finance reported. Meta fell 6.98 percent after its results, Tesla slipped 3.08 percent, and cloud provider CoreWeave fell about 10 percent on worries about its debt. Oil hit its highest since May, with Brent above $111, after reports that the US and Israel were preparing new strikes on Iran after the US midterm elections.
UNCERTAIN
Whether the AI selloff deepens. IBM’s CEO Arvind Krishna said companies are looking harder at whether their AI spending pays off. Treasury yields fell as investors moved into bonds, with the 10-year near 5 percent.
WHY IT MATTERS
Big companies are starting to ask for proof that AI spending pays off. Philippine clients will ask the same of any AI tool or service you sell or buy.
RISK / OPPORTUNITY
Opportunity: providers who can show clear savings or sales from AI will stand out. Risk: vague AI pitches will get harder to sell.
NEXT MOVE
If you sell AI-based services, add one before-and-after number to every proposal, such as hours saved or leads gained.
● US pulls some diplomats from Saudi Arabia after Houthi attacks
WHAT HAPPENED
The US ordered some diplomats and their families to leave its missions in Saudi Arabia after new Houthi attacks, The Nation Thailand reported on Oct. 22. An attack at an airport in Dammam killed at least one person and wounded eight, and a drone attack on a Saudi oilfield killed two. Kpler counted at least 18 attacks on ships in two weeks. Brent rose to $110.11 in Asian trading.
UNCERTAIN
How far the fighting spreads. One possible relief: the Kremlin said Putin agreed to resume US-mediated Ukraine peace talks as early as November, which BOK Financial’s Dennis Kissler said could ease tight global diesel supply.
WHY IT MATTERS
Saudi Arabia is home to many overseas Filipino workers, whose remittances support spending back home. Attacks on Saudi oil sites also keep diesel and freight costs high here.
RISK / OPPORTUNITY
Risk: weaker spending by OFW families if more Filipinos are affected, and higher fuel costs.
NEXT MOVE
If many of your customers are OFW families, watch for changes in their buying and consider flexible payment options for the holidays.
● The US Fed meets next week; a pause is the base case
WHAT HAPPENED
The US Federal Reserve meets on Oct. 27 and 28, after raising rates by a quarter point in September for the first time in more than three years, J.P. Morgan Wealth Management wrote in an Oct. 14 outlook published by Chase. Its base case is a hold this month, with 50 more basis points of hikes expected into 2027. US inflation rose to 3.7 percent in September, driven by energy prices, while only 29,000 jobs were added and unemployment rose to 4.2 percent.
UNCERTAIN
The timing of the next hike. New York Fed President John Williams said there may be “no need for urgency,” while Fed Chair Kevin Warsh has called price stability the priority but given little guidance on timing.
WHY IT MATTERS
A US hike would add pressure on the peso just as the BSP has raised rates. A hold could give the peso some room.
RISK / OPPORTUNITY
Risk: another leg down for the peso if the Fed surprises with a hike.
NEXT MOVE
If you need to buy dollars for a big order, avoid buying it all at once right before the decision, which lands early on Oct. 29, Manila time.
J.P. Morgan Wealth Management via Chase →
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Over half of MMDA’s 2027 budget goes to flood control
The MMDA wants to spend P3.4 billion, about 52 percent of its proposed P6.56 billion budget for 2027, on flood control and sewerage, the Philippine News Agency reports. Of that, P2.51 billion is for capital projects. The government plans to install or upgrade 13 pumping stations, with operations targeted for late 2026 or early 2027, and the MMDA has identified 39 possible rainwater catchment sites, starting with five priority projects in Quezon City and Manila worth about P4.05 billion under separate funding. MMDA chair Romando Artes told senators the agency cannot guarantee a flood-free Metro Manila. That admission is the opening. Public money will keep going to big drainage works, but buildings, shops and warehouses still need their own protection. Contractors, waterproofing and drainage specialists, and suppliers of flood barriers and backup pumps can offer flood-readiness packages to businesses before the next rainy season. For any business owner, a site check now costs far less than lost stock later.
SECTION 4 · FOUNDER’S LESSON
Fix the leaks before you chase more supply
Maynilad replaced 23.11 kilometers of old, leaky pipes in Las Piñas for P200 million and now recovers 3.73 million liters of water a day, the Daily Tribune reports. Water pressure for the area’s 50,000 customers rose about fourfold, from 4 psi to 16 psi, so water now reaches some third floors without booster pumps. The water was already in the system. It was just being lost on the way. Most businesses have the same problem. Unbilled work, unpaid invoices, customers who leave without anyone noticing, and discounts nobody tracks all drain money that you already earned. Before you spend on finding new customers, especially now that borrowing costs more, list where money leaks out of your business and fix the biggest one first.
SECTION 5 · ONE REAL SIGNAL
BPI is lending much more to small businesses, and setting aside more for bad loans
BPI’s nine-month profit fell 3.2 percent to P48.9 billion, InsiderPH reports, even as total loans grew 13.6 percent to P2.7 trillion. SME lending jumped 46.7 percent, credit card loans 27.2 percent and personal loans 21.7 percent. At the same time, provisions for bad loans rose 69.2 percent to P19.9 billion, the bad-loan ratio rose to 2.5 percent from 2.3 percent, and the bank’s cushion against those bad loans thinned. Our reading: banks still want to lend to small businesses, but they are preparing for more borrowers to struggle, and that was before Thursday’s half-point hike. Expect credit to stay available but with stricter checks, more paperwork and higher rates. If you plan to borrow in the next six months, get your financial statements and tax filings in order now.
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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