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(Bloomberg) — New Philippine central bank Governor Eli Remolona signaled that further monetary policy tightening is still on the table for the Southeast Asian country, and said it’s “premature” to talk about cutting the key rate.

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The Bangko Sentral ng Pilipinas remains on the “tightening side” as it monitors upside risks to inflation, including El Nino and wage hikes, Remolona said in Canada on Friday in a Bloomberg Television interview, among his first since taking over leadership of the central bank.

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“For now, we’re contemplating whether to hike or not to hike,” the governor told Bloomberg TV’s Kathleen Hays on Saturday. “We’re not thinking about whether to cut or not to cut. 

The central bank is also watching for any “sharp” movement in the Philippine peso if the US Federal Reserve further tightens monetary policy, Remolona said. The local currency has strengthened and is among the region’s best performers so far this year.

Aggressive Tightening

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The Philippine economy remains “very strong,” the central bank chief said, while adding that the BSP would still like to see what impact its most aggressive tightening cycle in two decades — which lifted the key rate to a 16-year high — will have on growth.

A rate cut could be considered if inflation was already “well into” the central bank’s 2%-to-4% target, or if there was a global recession, he said. Headline inflation was at 5.4% in June, still way above the goal despite easing for five straight months.

The governor also said he wants to further lower banks’ reserve requirement ratio, but added that this wouldn’t coincide with any monetary policy tightening.

Remolona, who assumed the central bank’s top post earlier this month, has said the BSP is “determined” to lower inflation to its target. 

A former official at the Bank for International Settlements, the 70-year-old governor has repeatedly described the Philippine central bank as “structurally hawkish” and emphasized its inflation-targeting role during his first weeks in office.