BSP maintains key policy rates

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The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided to maintain its key policy rates on the back of benign inflation environment.

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In a press briefing on Thursday, BSP Governor Amando Tetangco Jr. said that interest rates for the overnight borrowing or reverse repurchase (RRP) facility was kept at 3.5 percent, while overnight lending or repurchase remained unchanged at 5.5 percent. The reserve requirement ratios were kept steady as well.

The interest rates on the special deposit account (SDA) facility were left unchanged at 2 percent. Since January, BSP slashed the interest rates for SDAs by a total of 150 basis points.

Meanwhile, Tetangco reported that latest baseline forecasts indicate that the future inflation remains in line with the target range of 4 percent plus or minus 1 percent in 2013 to 2014, and 3 percent plus or minus 1 percent for 2015, while inflation expectations remain firmly anchored.

Tetangco added that the assessment of risks to the inflation remains unchanged, noting the bulk of lending going to the productive sectors of the economy.

He also said that the “improvement in the economy’s absorptive capacity is expected to be sustained, helping to moderate price pressures.”

“Going forward, the BSP will continue to monitor emerging price and output conditioned to ensure that monetary policy remain consistent with price stability while being supportive of economic growth,” he added.

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