The Monetary Board said Thursday it will keep interest rates on the Bangko Sentral ng Pilipinas' overnight reverse repurchase rate steady.

'' At the MB policy meeting today, we decided to keep the interest rate on the BSP’s overnight RRP facility at 6.25 percent,'' said BSP Governor Felipe Medalla in his Twitter account.

Accordingly, the interest rates on the overnight deposit and lending facilities were kept at 5.75 percent and 6.75 percent, respectively,'' added Medalla.

The pause in the Monetary Board rate hikes came as the Philippines was able to lower inflation for the last three months.

Inflation declined from 8.7 percent in January to 8.6 percent in February, 7.6 percent in March and 6.6 percent in April.

The Monetary Board said a pause in monetary policy tightening was ''appropriate''.

The BSP said average inflation is projected to settle at 5.5 percent, lower than 6 percent previously, while the average inflation forecast for 2024 fell slightly to 2.8 percent.

''While GDP growth has remained robust in the first quarter of 2023, demand indicators have also pointed to a potential moderation in the recent months, suggesting that previous policy rate increases by the BSP continue to work their way through the economy,'' the Monetary Board said.

The Monetary Board said ''even as headline inflation has continued to decelerate with slower increases in the prices of food and energy-related items, core inflation has only eased marginally.''

The Monetary Board added that ''the balance of risks to the inflation outlook remains largely tilted towards the upside owing to persistent constraints in the supply of key food items, the potential impact of El Nino on food prices and utility rates, as well as the effects of possible additional adjustments in transportation fares and wages.''

''The impact of a weaker-than-expected global economic recovery continues to be the primary downside risk to the outlook,'' the Monetary Board added. DMS