For inflation battle, Bangko Sentral Governor Remolona gets an ‘A-’

MANILA, Philippines – Bangko Sentral Governor (BSP) Eli Remolona Jr. has notched high marks in his first full year heading the Philippine central bank in its fight to bring inflation back down to its target range, according to Global Finance magazine.

In the 2024 Global Finance Central Banker Report Card, Remolona received an “A-” grade, along with 14 other central bankers. Although this was not the highest mark, Remolona’s score matched that of US Federal Reserve Chair Jerome Powell, whose decisions at the helm of the Fed significantly influence global markets.

The central bank heads of Denmark, India, and Switzerland earned the highest grade of “A+,” while 7 other central bankers received a grade of “A.”

Since 1994, Global Finance has annually published the Central Banker Report Cards, evaluating the performance of central bank governors from nearly 100 countries, territories, and districts.

These report cards assign grades ranging from “A+” to “F” based on criteria such as inflation control, economic growth targets, currency stability, and interest rate management. An “A” signifies “excellent performance,” while an “F” indicates an “outright failure.”

Remolona tames inflation

Remolona took over the BSP in July 2, succeeding Felipe Medalla. Prior to this, the quiet, seasoned monetary policy expert had been a member of the BSP’s Monetary Board since August 2022.

Remolona, like Medalla and Benjamin Diokno before him, faced the difficult task of reining in inflation in an economy still reeling from the effects of the COVID-19 pandemic. When Remolona entered office in July 2023, inflation stood at 4.7% and later soared to 6.1% in September 2023.

That prompted the BSP to announce an off-cycle interest rate hike in October 2023, with Remolona saying that the central bank “recognized the need for this urgent monetary action.” The BSP then maintained its key policy rate high at 6.5% for nearly 10 months. This strategy appeared effective, as inflation began to creep back down in 2024. Year-to-date average headline inflation stands at 3.7%, within the government’s 2% to 4% target range.

Earlier in August, Remolona also announced that the BSP would cut its rate to 6.25%, marking the first rate cut in nearly 4 years. Since May 2022, the BSP had raised its policy rate by 450 basis points with the goal of bringing inflation down.

“With inflation on a target-consistent path, the current macroeconomic outlook supports a calibrated shift to a less restrictive monetary policy stance,” Remolona said on August 15, adding that the risk-adjusted inflation forecast for 2024 was 3.3%.

Besides controlling inflation, Remolona has also pushed for the increased digitalization of the economy by trying to reduce fees on small digital payments and welcoming more digital banks. (READ: Are digital payment fees too high? Even Dutch Queen Máxima seems to think so) – Rappler.com