Philippines maintains overnight policy rate as inflation 'manageable'

By Jennifer Chiou

New York, Oct. 21 - The Monetary Board of the Bangko Sentral ng Pilipinas opted to leave the policy rate unchanged at its Thursday meeting, while reserve requirement ratios were also kept steady.

The overnight borrowing rate stands at 4½%, and the overnight lending rate is 6½%.

The board said in a news release that while the inflation outlook is expected to be manageable, it continues to be mindful of any remaining upside risks to inflation, including potential increases in liquidity due to sustained capital inflows.

As announced in July, the board raised the regular reserve requirement by 100 basis points, effective Aug. 5.

The bank noted that it is keeping an eye on evolving price and output conditions, both on the global and domestic fronts, and will ensure that monetary policy settings remain appropriate.

The release added that the latest average baseline forecasts show a lower inflation path, consistent with the 3% to 5% target range for 2011-2013, while inflation expectations remain well-contained, supported by easing commodity prices.

Domestic economic growth has moderated as the global recovery has slowed down and as domestic public spending has been weaker than expected, the board stated, adding that it believes that the risks surrounding the inflation outlook over the policy horizon are slightly tilted to the downside.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.