Filipino Monetary Policy Settings Kept Steady

June 14, 2012

The Monetary Board of Bangko Sentral ng Pilipinas agreed to retain a 4.0% overnight borrowing rate and a 6.0% overnight lending rate.  These were reduced earlier this year in January by 25 basis points and again by the same amount in March but left unchanged at the April meeting.  Officials “believe that the benign inflation outlook and robust domestic growth provide adequate room to keep policy rates unchanged, especially as the cumulative 50-basis-point reduction in policy rates and the operational adjustments in the reserve requirements earlier in the year work their way through the economy.”  The statement goes on to say that “Latest baseline forecasts continue to track the lower half of the 3-5 percent target range for 2012 and 2013, while inflation expectations remain firmly anchored. At the same time, domestic macroeconomic readings have improved significantly in the first quarter. Adequate liquidity and strong bank lending, spurred by prevailing low interest rates, should also help sustain domestic real sector activity in the months ahead.”

Today’s policy decision was expected.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.