Filipino Monetary Policy Not Changed

November 5, 2009

As expected, the Central Bank of the Philippines retained a 4.0% rate for overnight borrowings.  It has been that level since a 25-basis point cut in late August.  Altogether, the rate was reduced by 225 basis points since an initial cut in early December 2008.  A new statement from the central bank called the 4.0% rate appropriate to encourage the recovery of domestic demand.  Inflation expectations were called “well anchored,” and the statement predicted that although the path of future inflation has been revised somewhat higher, it would be close to the 3.5% 2010 target corridor floor.  CPI inflation has recently accelerated from 0.1% in the year to July to 0.7% in September and 1.6% in October.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.


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