Amid speculation about an impending increase in interest rates in the country, the Bangko Sentral ng Pilipinas (BSP) on Thursday hinted at adjusting its monetary policy following the United States Federal Reserve’s move to start cutting back on providing liquidity to the system under its quantitative easing program.
In a text message to reporters on Thursday, BSP Gov. Amando Tetangco Jr. said the Philippine central bank regards early, measured adjustments to monetary policy as “ideal” in countering any volatility that may be caused by external developments.“Gradual rather than discrete movements would be less disruptive and would help businesses plan better,” he said.
Earlier, the US Fed said at the conclusion of its meeting it would continue cutting its monthly purchases of US Treasuries and mortgage-backed securities by a further $10 billion to $55 billion a month. This is the third reduction by the US central bank in its monthly purchases by $10 billion, premised on the Federal Open Market Committee view that the economy has “sufficient underlying strength.” Prior to the tapering moves, which began in December, its purchases amounted to $85 billion a month.
The US Fed said it could end its bond-buying program by end-September and start raising interest rates about six months later. (continued on B1)