MANILA — The Philippine central bank decided to keep its policy rate at 4.25% during a surprise off-cycle meeting on Thursday and said its monetary policy would focus on second-round effects from global oil price shocks.
Governor Eli Remolona said the off-cycle meeting was required because close attention needed to be paid to a fast-changing and uncertain economic environment, which he described as “a very unusual situation”.
The Bangko Sentral ng Pilipinas, which was not scheduled to review interest rates until April 23, said mounting risks to inflation required sustained vigilance.
Remolona said monetary policy would be blunt amid current upside risks to inflation, so maintaining the current rate was manageable. The BSP saw economic growth of 4.4% this year and 5.9% in 2027, he said.
“Monetary policy will focus on addressing likely second round effects of the oil price shocks: for that we will remain vigilant,” Remolona told a press conference.
“We will be guided by data and we will act as needed to pursue our primary mandate.”
Inflation was forecast at 5.1% this year, above the 4% ceiling, but would move back to 3.8% in 2027, he said, adding that the BSP was closely monitoring core inflation in particular.
In a statement issued minutes earlier, the BSP said it expected economic growth to remain weak in 2026, and raising the policy rate at this time would delay the recovery.
—Reporting by Mikhail Flores and Karen Lema; Writing by Martin Petty; Editing by David Stanway
