Seal of Bangko Sentral ng Pilipinas (1993-2010) (Photo credit: Wikipedia)The Bangko Sentral ng Pilipinas (BSP) yesterday maintained its key policy rates, noting that easing inflation has given it more room to pause after two rates cuts this year.
As such, interest rates remained at a record low of four percent for the overnight borrowing rate and at a record low of six percent for the overnight lending rate.
“The Monetary Board’s assessment of a favorable inflation environment formed the primary basis for the latest monetary policy decision,” BSP Governor Amando Tetangco Jr. said.
He said the latest baseline forecasts continue to indicate that inflation will likely settle near the lower half of the three- percent to five-percent target range in 2012 and 2013, while inflation expectations have remained well anchored.
Because of easing inflation, the BSP has revised downward its inflation forecast for 2013 to 3.3 percent from a previous forecast of 3.4 percent.
At the same time, monetary authorities noted that the balance of risks to the inflation outlook now leans toward the upside as oil prices have remained elevated and at risk from ongoing tensions in the Middle East as well as strong demand from emerging economies.
Moving forward, the BSP will continue to pay close attention to the outlook for inflation and growth to ensure that monetary policy settings remain consistent with price stability while being supportive of non-inflationary economic growth.
The first BSP rate cut was made last Jan. 19 followed by another 25-basis point reduction on March 1 on the back of a benign inflation outlook and slower than expected global economic growth.
Inflation eased to 2.6 percent in March from 2.7 percent in February, latest data from the National Statistics Office (NSO) said.
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