MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is prepared to do whatever necessary to contain inflation, its governor said on Friday, leaving the door wide open to more interest rate hikes after the bank delivered a 25-basis-point increase a day earlier.
"The market needs to understand that we will do what is necessary to contain inflation," Governor Eli Remolona said in an interview with Bloomberg TV. "At the moment, that seems like a succession of modest rate hikes."
The Bangko Sentral ng Pilipinas raised its key policy rate PHCBIR=ECI by 25 basis points to 4.50 percent on Thursday, ending its easing cycle.
Remolona said the economy would likely grow between 4.5 percent to 4.6 percent this year, slightly better than an earlier projection of 4.4 percent, but still below the government's 5.0 percent to 6.0 percent target in 2026.
"Our potential is much higher than our forecast," Remolona said.
Supporting the Philippines' consumption-driven economy is the steady flow of remittances, which Remolona said remained resilient despite the conflict in the Middle East where over two million Filipinos are living and working.
