President Ferdinand Marcos Jr. said interest rate cuts are not yet on the table as battling inflation remains the government's top priority.

In a recent television interview, Marcos Jr. said there is still the need to address shocks affecting agricultural products, which continue to drive up overall inflation.

"We are not yet there" in terms of cutting rates, Marcos added, indicating that the situation is constantly monitored, with the possibility of adjustments being reviewed "almost every week."

The Philippines is currently experiencing high-interest rates set by the Bangko Sentral ng Pilipinas (BSP) to combat inflation.

In its first rate-setting meeting in 2024, held last 15 February, the BSP's Monetary Board maintained its key policy rate at 6.5 percent, marking the third time that the central bank has kept rates steady since an off-cycle hike in October 2023.

The BSP controls inflation by raising or lowering the key policy rate, which in turn affects the interest rates that banks charge consumers and businesses.

Theoretically, raising or maintaining interest rates at an elevated level can discourage people from borrowing and spending, slowing down economic growth and the rise in prices.

Latest government data showed that the rate of headline inflation in the Philippines increased to 3.4 percent in February from 2.8 percent in January due to increases in the cost of food, beverages, and transportation.

The government's full-year aim of 2 to 4 percent was exceeded by the average inflation from January to February 2024, which was 3.1 percent.

Peso gain: A good sign for economy

Meanwhile, Marcos Jr. said that the Philippine peso's recent strength, reaching a three-month high, is a sign of a robust economy.

“I see it as an affirmation that the economy has grown stronger, and that is, that's one of those obvious tests,” he said.

He acknowledged the potential downside for overseas Filipino workers (OFWs) due to the weaker dollar but emphasized the positive implications for the overall economy.

"There is a downside to it for the Philippines because of our overseas workers... But I see it as an affirmation that the economy has grown stronger," Marcos Jr. said.

“And the dollar, I mean, of course, because it's a relative, it's a relative measure, the dollar has not depreciated. So, if the value of the peso is increasing, then that is a good indication that, again, the economy has gained strength,” he added.