Central Bank of The Philippines

May 14, 2015

The last changes made to the overnight lending and overnight borrowing rates were hikes of 25 basis points in July and September of 2014.  Those rates since then have been at 6.0% and 4.0%.  This month’s policy meeting decided to keep those levels and also made not changes to reserve requirements.  A released statement reaffirmed that “current monetary policy settings remain appropriate given a manageable inflation environment. Latest baseline forecasts continue to indicate that inflation is likely to settle within the lower half of the target range of 3.0 percent ± 1 percentage point for 2015-2016, while inflation expectations remain firmly anchored given the recent string of inflation outturns. The Monetary Board likewise observed that the risks to the inflation outlook continue to be broadly balanced, with upside risks emanating from pending petitions for adjustments in electricity rates and possible power shortages. Meanwhile, downside risks remain for global growth, even as prospects have become more evenly balanced.”  The two rate hikes represented a policy reversal.  There had been no rate changes in 2013, four cuts were engineered in 2012.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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