Bangko Sentral ng Pilipinas Leaves Filipino Central Bank Interest Rates Unchanged

September 22, 2016

A narrower interest rate corridor framework for monetary policy in The Philippines was adopted in June. A policy meeting in August did not change settings, which were also maintained after this month’s meeting. An overnight reverse repo rate of 3.0% is flanked by an overnight deposit rate of 2.5% and an overnight 3.5% lending rate. Bank officials have a 2-4% inflation target. While actual inflation lately ran a bit high, monetary officials attribute this in a released statement to supply-side factors and observe that expected inflation remains anchored and in line with the medium-term inflation target. Hence, inflation is considered “manageable” and the current interest rate levels “appropriate” even though its risks are somewhat tilted to the upside. Finally, the statement warns, “increased uncertainty over prospects for growth and monetary policy action in major advanced economies warrants prudence in policy settings.”

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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