MONETARY authorities will cut key interest rates by 25 basis points (bps) once inflation settles around the midpoint of the target range, the chief of the Bangko Sentral ng Pilipinas (BSP) said.

"Right now, if we ease, it will just be 25 basis points. But we'll see," central bank Governor Eli Remolona Jr. told reporters on Monday.

"Anything more than 25 [bps], it's like there's a recession already. It's like a hard landing. But for now, we don't see it coming," he added.

The BSP's policymaking Monetary Board, Remolona continued, remains hawkish and expects to only start implementing rate cuts late this year or in the first quarter of 2025 as inflation will likely exceed target in the second quarter.

"It seems that inflation movements are hovering around 3.9 percent ...," he said, adding that it should "hopefully" be "around 3.0 percent."

"If it's 3.9 percent, it's easy to become 4.1 percent, like that. It's still uncertain. So we remain hawkish."

Inflation accelerated to 3.7 percent in March, up from 3.4 percent in the previous month as prices of key food items — particularly rice and meat — and transport costs rose.

Last week, the BSP said that April inflation could range from 3.5-4.3 percent, with rising prices of rice and meat, increased gasoline costs, and a weakening peso cited as contributing factors.

It said that it was watching inflation and economic growth and would maintain a data-driven approach with regard to monetary policy decisions.

April inflation data is scheduled to be released today, May 7, while preliminary first quarter economic growth results will be issued on Thursday, May 9.

Analysts polled by The Manila Times expect inflation to have slightly exceeded target at 4.1 percent and January-March growth to come in at 5.9 percent, just below the full-year goal of 6.0-7.0 percent.

The data releases will be considered by the Monetary Board when it meets to discuss policy on May 16.

The BSP's benchmark rate currently stands at 6.5 percent, the highest since 2007, after rate hikes totaling 450 basis points beginning May 2022 as inflation surged following Russia's invasion of Ukraine.

Analysts expect monetary authorities to again hold fire for a fifth straight meeting next week with inflation yet to settle firmly within target.

The BSP, HSBC Global Research economist Aris Dacanay said, has the "luxury to keep its policy rate tight for a longer period to ensure that inflation expectations are well anchored."

The US Federal Reserve also kept rates steady last week, lessening pressure on the BSP to adjust.

Remolona said the Fed move had already been considered by Philippine monetary authorities and would have little impact on domestic policy.

"There's a minimal effect. Not a whole lot. We'll still focus on our own data," he said.

"We know they will pause anyway. So it's already been factored in," Remolona added.

"The somewhat new news is that on Friday, the non-farm payroll number came out. The unemployment number. It was somewhat weak," he continued.

"So that means, I think, it makes it more likely that the Fed would ease. Sooner than otherwise. So we'll see."

The US central bank, Remolona said, will likely start cutting rates by September.