BSP keeps interest rates steady but revises inflation outlook

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THE Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided on Thursday to keep its key interest rates steady, but revised upward its inflation outlook for 2017.

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“The Monetary Board’s decision is based on its assessment that the outlook for inflation environment remains manageable,” Bangko Sentral Governor Nestor Espenilla Jr. told reporters after the Monetary Board policy meeting on Thursday.

The board revised upward its inflation forecast for 2017 to 3.2 percent from the previous outlook of 3.1 percent. It also revised to 3.2 percent and 3.1 percent previous forecasts for 2018 and 2019, respectively.

In Thursday’s policy meeting, the board also decided to keep the reverse repurchase facility rate at 3 percent.

The corresponding rates for overnight lending and deposit facilities also remained unchanged at 3.5 percent and 2.5 percent, respectively, along with the reserve requirement ratio, which stood steady at 20 percent.

Since lowering the reverse repurchase rate to 3 percent from 4 percent in the run-up to adopting an interest rate corridor system on June 3, 2016, the central bank has kept the policy rate unchanged.

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