Monetary Policy in the Philippines Left Unchanged

October 7, 2010

As expected Bankgo Sentral Pilipinas has retained a 4.0% reverse repo rate and a 6.0% repo rate.  Despite strengthening domestic demand and robust GDP growth of about 8% in the year to 2Q, a statement from central bank officials observed that consumer price inflation remains low and within target and moreover that price expectations continued to be well anchored and consistent with the target of 3.5-5.5% this year and 3-5% in 2011 and 2012.  The CPI rose 3.5% in the year to September.  The statement called present rate settings “appropriate” but promised to stay on the lookout for any upturn in price pressures.

Six rate cuts implemented between December 2008 and July 2009 previously cut the overnight deposit rate by 200 basis points in total to the still-record low of 4.0%.  Several other Asian central banks have begun raising rates, which has subjected their currencies to upward pressure.  Even with steady rates, the Philippines peso has also been rising.

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



Comments are closed.