The Bangko Sentral ng Pilipinas (BSP) will keep interest rates unchanged at 6.5% despite below-target inflation, citing concerns about the potential impact of El Niño on food prices and future inflation levels.
While February’s 3.4% inflation rate remained within the BSP’s target range, the central bank expressed caution due to upside risks such as rising transportation costs, electricity rates, and fuel prices.
February inflation rose to 3.4% in February, up from 2.8% in January but still within the projected range.
According to the BSP, inflation could temporarily accelerate above the target range from the second quarter due to the adverse impact of El Niño on agricultural production and positive base effects.
The BSP said it continues to monitor the potential impact of El Niño on food prices and overall inflation.
It underscored the importance of collaborating with the government on non-monetary measures to address supply-side issues and maintain price stability.
