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MANILA - The Philippine central bank has space to cut interest rates further faced with a "real risk" of recession due to the coronavirus pandemic, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Sunday.

The economy likely kept growing in the first quarter but could contract in the succeeding two quarters, with businesses shut due to the lockdown of millions in Luzon, Diokno told ANC.

The BSP has cut 1.5 percentage points of the total 1.75-point increase in the benchmark borrowing rate in 2018. It now stands at 3.25 percent.

"We will have a lot of room for cutting interest rates," Diokno said.

"There's a real risk that there will be a technical recession (in the second and third quarter)," he said."If we do the right thing, we can restart the economy sometime in May."

A recession happens when an economy contracts for two consecutive quarters.

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Diokno said he was hopeful that pandemic would not affect the flow of dollar remittances from overseas as Filipino expatriate workers "recognize the needs" of their families in the Philippines.

"This crisis is like no other crisis in the past... Crisis or no crisis, OFW remittances have been steady," he said.