The Bangko Sentral ng Pilipinas (BSP) has kept its key policy rate unchanged at 4.25 percent, citing rising inflation risks and ongoing global uncertainties.

In a statement, BSP Governor Eli M. Remolona Jr. said the Monetary Board opted to maintain the rate amid fast-changing economic conditions and supply-driven price pressures.

The central bank noted that the ongoing Middle East conflict has pushed global oil and fertilizer prices higher, already translating into increased domestic fuel costs and transport fares.

Latest BSP projections show inflation in 2026 could breach the 4.0-percent ceiling before easing back within the target range by 2027, although inflation expectations remain well-anchored.

The Monetary Board said near-term inflation risks are largely supply-driven, limiting the effectiveness of monetary policy tools. At the same time, the BSP flagged continued weak economic growth this year, warning that raising interest rates could delay recovery.

Despite holding rates steady, the central bank said it will remain vigilant and ready to act to address potential second-round effects of inflation, in line with its mandate to maintain price stability.