Philippine central bank governor Medalla noted that the aggressive tightening cycle might continue and halting interest rate hikes at the May policy meeting may be premature, despite annual inflation standing near a 14-year high of 8.6% in February. The central bank may pause rate hikes if prices decrease on a month-to-month basis. Medalla highlights that Philippine banks can withstand higher interest rates, given their liquidity and capitalization, after reducing bond holdings during the pandemic.