Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona suggested that key interest rates could remain on hold if inflation continues to fall, with the possibility of rate cuts if inflation returns to the target range, as the latest inflation data eased to 5.4 percent in June.
This gives monetary authorities more room to assess policy and potentially keep rates steady after two consecutive pauses.
However, economists caution that certain factors, such as increased rice prices and minimum wage hikes, could pose upward risks.
Economists also said that it may be premature to assume that the period of interest rate hikes is over, particularly given the potential impact of the US Federal Reserve’s actions on the foreign exchange market and the country’s trade and current account deficit.
