The Bangko Sentral ng Pilipinas (BSP) has no clear timetable for resuming interest rate cuts as it remains focused on containing inflation pressures from core prices and peso depreciation, Governor Eli Remolona Jr. said.
“Wala pa, nasa tightening pa tayo. We don’t know,” Remolona said when asked when the next easing cycle might begin.
His remarks suggest the central bank is not yet ready to signal a shift toward lower borrowing costs, even as policymakers weigh the risk that tighter monetary conditions could further restrain economic activity.
Asked whether the tightening phase could extend into next year, Remolona said the outlook remained uncertain. He expects inflation to peak in “a few more months,” keeping the possibility of further policy action in play ahead of the BSP’s December meeting.
But he stopped short of signaling another increase, including an off-cycle adjustment, saying the decision would depend on incoming economic data.
“Depende. Maraming data pang hinihintay,” he said.
Remolona said the BSP considers both inflation and economic growth in setting policy, including the output gap, or the difference between actual economic activity and the economy’s potential output.
“So kung masyadong negative yun, less likely kami mag-tightening,” he said, referring to the possibility that a weak economy could discourage another rate increase.
He noted that economic growth recovered in the third quarter and that the government was working to accelerate spending, factors that could influence the central bank’s assessment of demand conditions.
The BSP is paying particular attention to core inflation, which strips out more volatile price components and offers a better gauge of underlying price pressures, Remolona said. Monetary policy is forward-looking and cannot directly address temporary supply-driven price spikes, he added.
He also cautioned that a sufficiently sharp depreciation of the peso could feed into domestic prices, adding another source of uncertainty to the inflation outlook.
The December policy decision will therefore hinge on how inflation and growth data evolve.
The BSP has left both the possibility of further tightening and the eventual return to easing open, without committing to a timetable.
