(Bloomberg) -- The Philippine central bank has a “good chance” of resuming monetary tightening in November and may increase its benchmark interest rate further after that amid “relentless” supply shocks, Governor Eli Remolona said.

“We’re not convinced it would be the last one. It won’t be the last hike in the cycle,” Remolona said in an interview with Bloomberg Television’s Yvonne Man on Friday, when asked if a rate hike at its next policy meeting could be the final one in the central bank’s current tightening campaign.

Bangko Sentral ng Pilipinas is particularly watching likely increases in power and transport costs, which Remolona said can fan inflation that remains way above the 2%-4% target even after 425 basis points of rate hikes. Those pressures are coming on top of surging rice and fuel prices that may prompt what is already the BSP’s most-aggressive tightening campaign in two decades to extend.

The BSP kept what it now calls the target reverse repurchase rate steady at a 16-year high of 6.25% for a fourth straight meeting on Thursday but signaled that the tightening era isn’t over as the latest inflation forecast for 2024 is coming closer to the top-end of its target.

A rate increase was considered on Thursday, but monetary board members unanimously opted to stand pat, Remolona said. “If the inflation numbers had just been a bit worse, we might have gone for a hike this time,” he said.

The governor also reiterated that rate cuts are not on the table for the November meeting as he signaled on Friday that the path to monetary easing is becoming more strained. “The output numbers have to be pretty bad, and inflation numbers pretty low for us to consider a rate cut next year,” he said.

The Federal Reserve’s indication of one more rate increase this year and the local currency’s recent weakness aren’t as much a factor in the BSP’s policy stance this time, said Remolona.

The peso’s movements “have not been that sharp” and are unlikely to affect inflation expectations, he said. “The weakness doesn’t seem to come from the difference in the policy rate,” he said.

The peso is among Southeast Asia’s worst-performing currencies this quarter, touching a 10-month low recently. It was little changed at 56.86 per dollar as of noon trading break in Manila.

Before the governor’s remarks, Citigroup Inc. delayed its call for the BSP’s pivot to rate cuts by a quarter to the April-June period, citing the central bank’s “higher for longer” guidance. Citi, in its research note published Thursday, said it doesn’t expect the Philippine central bank to hike further due to concerns over a slowing economy.

As things stand, the impact of rate increases since May 2022 will be felt until the first half of 2024 and further hikes are seen to hurt the economy’s potential, Remolona said in the interview. “But that’s the price we have to pay if inflation is too high,” he said.

--With assistance from Andreo Calonzo, Anand Menon and Karl Lester M. Yap.

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