MANILA (Reuters) – The Philippines’ central bank has room to ease monetary policy, its governor said on Thursday, after data this week showed annual inflation remained within a target range of 2% to 4% in 2024.
“There is still room for concessions,” Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said at the Rotary Club event.
The Philippines hit its inflation target of 2% to 4% last year for the first time since 2021, although the pace of consumer price growth accelerated for a third straight month in December to 2.9%, above economists’ expectations.
Remolona said that uncertainties related to the trade policy of US President-elect Donald Trump pose a challenge to inflation.
CNN reported Wednesday that Trump is considering declaring a national economic emergency to provide legal justification for a series of blanket tariffs on allies and adversaries alike.
Trump’s proposed tariffs, which include tariffs of 10% on global imports and around 60% on Chinese goods, and plans to deport some immigrants, could boost inflation, fueling expectations that the US central bank will slow rate cuts.
But Remolona said the BSP’s policy direction does not depend on what the Fed does.
The BSP cut its key interest rate by 25 basis points for the third time in December to 5.75%, but signaled that further easing this year could come in “small steps” as inflation remains a concern.
