Metro Manila (CNN Philippines) — Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. announced on Thursday (September 24) that the bank’s Monetary Board has decided to maintain key policy rates at 4.00 percent for the overnight borrowing or reverse repurchase (RRP) facility and 6.00 percent for the overnight lending or repurchase (RP) facility.
The interest rates on term RRPs, RPs and special deposit accounts (SDA) were left untouched, as was the reserve requirement ratios of banks.
According to Tetangco, the board’s decision was based on its assessment of the dynamics and risks in the inflation environment.
He said that inflation is expected to “return gradually” to a path consistent with the inflation target for 2016 to 2017, despite latest baseline forecasts showing inflation falling below the target range for 2015.
“The Monetary Board noted that upside risks could come from the impact of stronger and protracted El Niño dry weather conditions on food prices and utility rates as well as pending petitions for power rate adjustments. In addition, the Monetary Board considered the weakness in the global economy and the continuing uncertainty in the global financial markets,” he said.
According to the BSP governor, the Monetary Board believes that domestic demand conditions remain firm, as it is supported by “buoyant business and consumer sentiment and ample domestic liquidity.”
“[T]he Monetary Board believes that the benign inflation outlook and the economy’s underlying growth momentum provide ample room to keep monetary policy settings unchanged at this time,” he added.
