Manila, March 30 -- The Bangko Sentral ng Pilipinas (BSP) will likely maintain policy rates this year amid higher inflation projection and slow growth, BMI, a unit of Fitch Solutions, said Monday.

"While we had previously expected the BSP to cut rates at its April meeting, the US-Iran conflict upended this view. Inflation is likely to breach the BSP's 2-4% inflation target range in the coming months, but sluggish growth will keep the BSP on hold rather than tighten," BMI said in a report.

"As such, we expect the BSP to hold rates steady at 4.25% through 2026," it added.

BMI said the Middle East conflict led to a supply-induced price shock, which has driven up international oil prices significantly.

"And this has swiftly passed through...