The Philippines reported a significant inflation increase to 4.1% in March 2026, up from 2.4% in February, marking the highest rate in three years. This surge has led the Bangko Sentral ng Pilipinas to raise its policy rate to 4.5% as of May 2, the first hike in over two years. The central bank attributes the inflation spike to Middle East tensions, which have driven up oil prices and disrupted key energy transit routes. This development is impacting global markets, with the Bank of Brazil expected to increase the Selic rate, as market pricing indicates a 100% likelihood of a hike. Additionally, the probability of a Federal Reserve rate cut by June 2026 has decreased, with market sentiment reflecting concerns over sustained inflation due to rising fuel prices. Central banks worldwide are closely monitoring these inflationary pressures and their potential effects on monetary policies.