Philippine Finance Secretary Ralph Recto said on Wednesday (Jan 24) that inflation remains a “most urgent concern” and must be kept under control.

Recto, who took on the financial portfolio on Jan 15, is the government’s representative to the seven-member policymaking monetary board of the Bangko Sentral ng Pilipinas, which will meet for the first time this year on Feb 15 to review the direction of policy rates.

Headline inflation in December returned to target at 3.9 per cent, but average inflation for 2023 was 6 per cent, well above the central bank’s 2 per cent to 4 per cent target.

“It is imperative that we find ways and means to reduce inflation,” Recto told a news conference. “I support what the monetary board is doing. Like I said, it’s data driven.”

The central bank kept its benchmark rate steady at 6.5 per cent in the final two meetings of last year, after hiking rates by a total of 450 basis points since May 2022 to rein in inflation.

Recto said the possibility of oil prices and transport costs going up is there given escalating geopolitical tensions.

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“The central bank will look at all these data and make the appropriate decisions going forward. We recognise that there are external threats,” he said.

Bangko Sentral ng Pilipinas Governor Eli Remolona said on Monday, monetary policy would have to remain sufficiently tight given the inflation numbers, making a rate cut at its meeting next month unlikely. REUTERS