Philippine Central Bank Monetary Policy

MANILA (Reuters) – The Philippine central bank has room to ease monetary policy, its governor said on Thursday, following this week’s data showing annual inflation stayed within its 2% to 4% target range in 2024.

“There’s still some room to ease,” Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said at a Rotary Club event.

The Philippines reached its 2% to 4% inflation target for the first time since 2021 last year, even as the pace of consumer price increases quickened for a third straight month in December to 2.9%, above economists’ expectations.

Remolona noted uncertainties concerning U.S. President-elect Donald Trump’s trade policies pose challenges to inflation.

CNN reported on Wednesday that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries.

Trump’s proposed tariffs, which include tariffs of 10% on global imports and around 60% on Chinese goods, and plans to deport some immigrants, may stoke inflation, fueling expectations that the U.S. Federal Reserve will slow rate cuts.

However, Remolona stated that the BSP’s policy direction is not dependent on the Fed’s actions.

The BSP cut its key interest rate by 25 basis points for a third time in December to 5.75%, but indicated that further easing this year might come in “baby steps” as inflation remained a concern.