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Too soon to cut rates, BSP chief says

MANILA: Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said it is too early to cut key rates even if fresh inflation data remains within the government target and the forecast of the central bank. In a press chat Wednesday, Remolona said the 3.4-percent inflation in February 2024 suggests that 'the models are more or less right.' 'It's still too soon to declare victory. We seem to be on our way. But there's not enough data to assure us that we would settle within our target of 2 to 4 percent,' he said. The central bank chief added that February 2024's inflation data suggests that 'things are okay but not assured,' and the BSP continues to monitor and analyze upside risks and supply shocks that may arise and challenge the government's inflation target for the year. 'It's (a bit) on the edge. We can't say-I can't say that we're going to ease soon, but it's unlikely that we tighten some more,' Remolona said. He added that rice prices remain a source of upside risk domestically. On the other han d, it is oil globally. The Philippine Statistics Authority (PSA) reported Tuesday that inflation in February 2024 increased to 3.4 percent from 2.8 percent in its previous month as food inflation rose to 4.8 percent, with rice inflation climbing 23.7 percent due to tight supply and higher prices in the global market. Last month's inflation data remains within the BSP forecast of 2.8 to 3.6 percent. Source: Philippines News Agency