Philippine central bank keeps key interest rates steady

The decision to keep its key policy rate steady was the bank’s way of hedging against global uncertainties, its governor Eli Remolona said.

The latest inflation forecasts are not materially different from the previous forecasts in December. For 2025, the risk-adjusted inflation forecast rose to 3.5 per cent from 3.4 per cent in the previous meeting.

The risk-adjusted forecast for 2026 is unchanged at 3.7 per cent. Inflation expectations remain within the target range, the central bank said in a release.

The risks to the inflation outlook have become broadly balanced for 2025 and 2026. Nonetheless, upside pressures are seen to come from the utilities sector.

The monetary board noted that domestic growth prospects continue to be firm. However, uncertainty over global economic policies and their impact on the domestic economy has increased significantly.

On balance, uncertainty about the outlook for inflation and growth warrant keeping monetary policy settings steady.

The central anticipates continuing its measured shift to less restrictive monetary policy settings, even as previous policy adjustments further work their way through the economy.

ALCHEMPro News Desk (DS)