The Philippine central bank left its key interest rates unchanged, as widely expected, to support the economic recovery.
The Monetary Board of the Bangko Sentral ng Pilipinas, or BSP, decided to retain the overnight reverse repurchase facility rate at 2.00 percent.
The bank had last reduced its key rate by 25 basis points in November. Altogether, the bank lowered the rate by 200 basis points in 2020.
The interest rates on the overnight deposit and lending facilities were maintained at 1.50 percent and 2.50 percent, respectively.
The central bank said it remained committed to take appropriate measures to ensure that the monetary policy stance continues to support the recovery of the economy, consistent with its price and financial stability mandate.
Although inflation is expected to remain elevated in months ahead, it is forecast to return to the target range of 2-4 percent over the policy horizon as supply-side influences subside.
Policymakers noted that the emergence of new variants of the virus and possible delays in mass vaccination programs continue to temper prospects for economic recovery and growth.
While the current trend in inflation is likely to delay the central bank from easing further, it is unlikely to stop it, Alex Holmes and Gareth Leather, economists at Capital Economics, said.