KEY interest rates will stay "higher for longer," Finance Secretary Ralph Recto said, with monetary authorities likely to pause anew during next month's policy meeting.

"I don't expect interest rates to go up or go down," Recto told reporters last week, adding that "I think that interest rates will be higher for longer."

The Bangko Sentral ng Pilipinas' (BSP) benchmark rate currently stands at 6.5 percent, the highest since 2007, following 450 basis points (bps) of hikes beginning May 2022 as inflation surged in the wake of Russia's invasion of Ukraine.

Monetary authorities were originally scheduled to meet on April 4 but will now do so on April 8, choosing to wait for the April 5 release of March inflation data.

BSP Governor Eli Remolona Jr. has said that inflation could rise this month to 3.9 percent, from February's 3.4 percent, due to base effects.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. Photo from BSP

The rate could top 4.0 percent in the second quarter, the central bank has said, but still average within the 2.0- to 4.0-percent target this year.

Most analysts expect the BSP to begin easing policy in the second half and Recto said that it could come later in the year and be limited to just two cuts.

Further reductions of "around 200 [bps] at most" will follow in the next two years, he added.

"Therefore, I think it (the benchmark rate) will remain higher for a longer period."