• BSP maintains policy rates

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    The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) decided to keep the current key policy rates on the back of manageable inflation environment.

    In a press briefing on Thursday, BSP Governor Amando Tetangco Jr. said that interest rates for the overnight borrowing or reverse repurchase (RRP) facility remains at 3.5 percent.

    Overnight lending or repurchase facility was retained at 5.5 percent, while the reserve requirement ratios were kept steady as well.

    The central bank has kept its key policy rates since October 25, 2012, wherein it reduced the interest rate for the RRP facility from 3.75 percent to 3.5 percent.

    Furthermore, 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.

    “The Monetary Board’s decision is based in its assessment that the inflation environment remains manageable,” Tetangco said.

    On the other hand, the BSP governor assured that the MB pays close attention to the evolving economic growth and liquidity dynamics and their implications for price and financial stability.

    Tetangco also noted that prospects for domestic activity are expected to stay firm, despite the challenges brought by global economic conditions.

    He added that the country’s domestic activity would be supported by buoyant domestic demand, and favorable consumer and business confidence.

    “Moreover, as credit expands in lock-step with output growth, the economy’s improved absorptive capacity will likewise be sustained, thus mitigating inflation pressures,” Tetangco said.

    Lastly, the central bank governor assured the BSP’s continued monitoring of emerging price and output conditions to ensure the consistency of the monetary policy with stable prices and sustainable economic growth.

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