PH economy can absorb another rate hike, says BSP chief Remolona

The Philippine economy can still absorb another 25-basis-point rate hike, even after the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) already raised rates twice this year for a cumulative 50 basis points, a top official said Monday.

“Kayang kaya pa [It still can],” BSP Governor Eli Remolona Jr. told reporters in Manila City, when asked if the economy still has the capacity to handle a rate hike.

The BSP last month raised rates by 25 basis points, bringing the target reverse repurchase rate to 4.75%, the overnight deposit rate to 4.25%, and the overnight lending rate to 5.25%. It also raised rates by 25 basis points in April.

Economic growth, meanwhile, clocked in at 2.8% in the first quarter, slower than the 3% growth seen in the last quarter of 2025, and the 5.4% in the first quarter of 2025. It is also the slowest footing since the 3.8% contraction in the first quarter of 2021 when lockdowns were in place.

The country has also reached upper-middle-income country status in the latest classification of the World Bank, as the gross national income (GNI) per capita reached $4,850, exceeding the $4,636 threshold for the classification.

“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 mgagamit,” Remolona said.

(Our work now is to continue that, and hopefully reduce inequality, reduce poverty. We have the fundamentals that we can use.)

The inter-agency Development Budget Coordination Committee (DBCC)—made up of the administration’s economic ministers—has downgraded the economic growth target for the year to 3.5% to 4.5%. — BM, GMA News