Filipino Central Bank To Phase Out Liquidity-Enhancing Measures But Leaves Key Overnight Borrowing Rate at 4.0%

March 11, 2010

Bangko Sentral Ng Pilipines will reduce the peso rediscounting budget from P60 billion to P40 billion but has left its key borrowing and lending rates steady at 4.0% and 6.0%, their respective levels after cuts totaling 200 basis points and administered between December 2008 and July 2009.  After the final cut last July, officials announced a pause in part so the impact of the easing could be assessed.  Today they took the additional step of starting to remove emergency measures that had supplemented liquidity.  A statement from officials released today observed some supply-side price pressures but called inflation prospects manageable on the whole.  Asset prices are not in bubble territory.  Liquidity is ample, and domestic demand is gaining momentum.  Officials called policy settings “appropriate” and did not mention or hint about the timing of a rate increase.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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