Metro Manila (CNN Philippines, December 14) — The Bangko Sentral ng Pilipinas (BSP) has kept interest rates steady during the Monetary Board’s last meeting for this year.
In a briefing Thursday, BSP Governor Eli Remolona said the policy rate would remain at 6.5%.
Overnight deposit and lending facilities will also be kept at 6% and 7%, respectively.
This came following a cooler inflation print in November, which stood at 4.1%.
READ: Inflation drops further to 4.1% in November
Central banks around the world lean towards increasing interest rates to prompt businesses and consumers to shell out less money for goods and services.
A more expensive borrowing cost translates to paying more for capital, car, and housing loans.
Asked if monetary authorities are already done with their tightening cycle, the BSP chief said they would want to see firmer indications that inflation expectations are already anchored on the target range.
Remolona said upside risks to inflation remain amid higher prices of transportation, electricity rates, and oil products.
“The country’s medium-term growth prospects remain firm, with strong demand expected in the fourth quarter due to sustained consumer spending and improved labor market conditions,” he said.
“The BSP will also continue to monitor how firms and households are responding to tighter monetary policy conditions alongside evolving domestic and external economic conditions,” Remolona also said.
“The BSP remains ready to adjust monetary policy settings as necessary, in line with its mandate to ensure price stability,” he added.
By the first quarter of 2024, the inflation rate is projected to return to the target path of 2% to 4%.
However, the BSP said the inflation rate may temporarily accelerate in the second quarter due to the impact of El Niño.
