BSP keeps rates steady
BSP Governor Amando Tetangco Jr. said in a press conference the Monetary Board had decided to maintain policy rates at 3.5 percent for the overnight lending facility, three percent for the overnight reverse repurchase facility, and 2.5 percent for the overnight deposit facility. Jay Rommel Labra/File
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) decided yesterday to keep its benchmark interest rates steady despite the upward pressures on inflation.
BSP Governor Amando Tetangco Jr. said in a press conference the Monetary Board had decided to maintain policy rates at 3.5 percent for the overnight lending facility, three percent for the overnight reverse repurchase facility, and 2.5 percent for the overnight deposit facility.
He added the BSP also left the reserve requirement ratios unchanged at 20 percent.
Tetangco said the decision was based on the Monetary Board’s assessment that inflation would remain manageable and fall within the two to four percent target.
“Market expectations likewise remain anchored to the inflation target over the policy horizon. At the same time, the Monetary Board observed that inflation has remained elevated due largely to recent increases in food prices and underlying pressures,” he said.
He added monetary officials also noted the balance of risks surrounding the inflation outlook continues to be tilted towards the upside, given the transitory impact of the proposed tax reform program as well as possible further adjustments in transportation fares and electricity rates.
While prospects for the global economy have improved, he said risks remain tilted to the downside.
“The Monetary Board emphasized that even amid external headwinds, the outlook for domestic economic activity remains intact owing to buoyant household consumption and private investment, increased government spending, ample liquidity, and sustained credit growth,” he said.
Tetangco said the central bank would remain vigilant against any risks to the inflation outlook and would adjust its policy settings as needed to ensure that future inflation remains consistent with the medium-term target while being supportive of sustainable economic growth.
Francis Dakila Jr., managing director for Monetary Policy Sub-Sector at the BSP, said authorities have maintained its inflation forecast at 3.4 percent for this year and at three percent for 2018.
Inflation was steady at 3.4 percent in April, bringing the average to 3.2 percent in the first four months.
Despite the uptick in inflation in March and April, he explained the increase was balanced by the decline in oil price in the world market.
“The two factors just balanced each other,” Dakila said.
- Latest
- Trending
