Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said on Monday, July 6, 2026, that the Philippine economy can still absorb one more rate hike. “Kayang-kaya pa (It still can),” Remolona said at a luncheon when asked about the economy’s capacity to handle further monetary policy tightening.
Recent Rate Hike and Inflation Concerns
Last month, the BSP’s Monetary Board raised its key policy rates by 25 basis points, citing persistent inflationary pressures amid elevated global oil and fertilizer prices. The latest adjustment brings the BSP’s target reverse repurchase (RRP) rate to 4.75 percent. The interest rates on the overnight deposit and lending facilities were likewise increased to 4.25 percent and 5.25 percent, respectively.
Strong Fundamentals Underpin Economy
Remolona highlighted that the country’s upper-middle income status reflects “good fundamentals that are in place.” He noted, “Malaking bagay yun ah — six percent growth for several years (That is a significant achievement — six percent growth over several years). So some things are, some fundamentals are, there are good fundamentals that are in place. Ang trabaho natin ngayon ay ituloy yon tapos sana mabawasan yung inequality, mabawasan yung poverty. Meron tayong fundamentals na magagamit (Our job now is to sustain that momentum and, hopefully, reduce inequality and poverty. We have the fundamentals to work with).”
Outlook and Challenges
The BSP’s stance comes as the central bank continues to monitor inflation risks. The economy has shown resilience with sustained growth, but challenges remain in reducing inequality and poverty. Remolona’s remarks suggest that the BSP is prepared to act further if needed, while relying on the country’s solid economic base to weather additional tightening.
