BSP says it can afford to keep key rates low


MANILA, Philippines—The Bangko Sentral ng Pilipinas continues to have the flexibility to keep interest rates low, according to BSP Governor Amando Tetangco Jr.

The central bank on Thursday will convene the Monetary Board for a policy rate-setting meeting.

Tetangco told reporters on Friday that consumer prices would remain manageable over the short term, enabling the central bank to maintain a low-interest rate environment.

“We can afford to keep interest rates low,” Tetangco said.

Currently, the BSP’s key policy rates stand at historic lows of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending.

“The inflation outlook continues to be favorable. While there may be some slight uptick in inflation for January and February, this does not change the overall picture of a manageable inflation situation going forward,” he explained.

In a policy meeting held last January, the Monetary Board maintained record-low rates. Officials said the increase in consumer prices was expected to remain modest, allowing them to keep interest rates low to support economic growth.

But what the Monetary Board did last January was to reduce the interest rates on special deposit accounts (SDAs) to a uniform rate of 3 percent. Previously, the SDA rates were set above the overnight borrowing rate by different margins depending on maturity.

The BSP said that the reduction in the SDA rate—a move that would trim its expenses on interest payments—is meant to align policies in the country to best practices observed abroad. In many advanced and emerging economies, it said, interest rates offered through deposit facilities are set lower than the key policy rate.

In February, inflation inched up to 3.4 percent from 3 percent in January, and 2.9 percent in December. But the BSP noted that the average inflation for the first two months of the year, at 3.2 percent, is the same as the average reported during the same period in 2012.

Also, the surge in foreign capital inflows has elicited concerns over a buildup in inflationary pressures. The inflows are said to be adding up to the hefty liquidity circulating in the economy.

But so far, rising foreign capital inflows have not reached levels that can lead to a breach in the inflation target, Tetangco said. The inflation target is set at 3 to 5 percent for this year and the next.

“The impact of capital inflows on domestic liquidity has been manageable, and we have been able to contain liquidity growth to what is sufficient or to what is consistent with our growth and price objectives,” the central bank chief said.

Nonetheless, he added, the BSP is prepared to implement measures to ensure that the inflow of foreign capital will not destabilize the country’s economy.

Last year, the BSP revived a ruling prohibiting foreign funds from being invested in SDAs. It also issued a circular last week putting a cap on banks’ holdings of non-deliverable forwards. The measures are meant to temper the inflow of foreign capital.

The BSP earlier reported that gross inflow of foreign portfolio investments hit $2.8 billion in the first month of the year—over twice as much as the $1.2 billion registered in the same period of 2012.

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  • mxsclxmxn

    n the P100 BILL series 2012 Serial # ZK188477 has a logo of the Grand Lodge of Free and Accepted Masons. Freemasonry has its goal of destroying Christendom and replacing it with man-centered government and Satanic religion filled with errors. 
    How can this logo of a satanic group be allowed to print in the monetary instrument of the country with the constitution believing in a God asking for HIS Divine Providence?

    HUMANUM GENUSENCYCLICAL OF POPE LEO XIII ON FREEMASONRY APRIL 20, 1884  To the Patriarchs, Primates, Archbishops, and Bishops of the CatholicWorld in Grace and Communion with the Apostolic See.

    …. This twofold kingdom St. Augustine keenly discerned and described
    after the manner of two cities, contrary in their laws because striving
    for contrary objects; and with a subtle brevity he expressed the
    efficient cause of each in these words: “Two loves formed two cities: the
    love of self, reaching even to contempt of God, an earthly city; and the
    love of God, reaching to contempt of self, a heavenly one.”[1] At every
    period of time each has been in conflict with the other, with a variety
    and multiplicity of weapons and of warfare, although not always with
    equal ardor and assault. At this period, however, the partisans of evil
    seems to be combining together, and to be struggling with united
    vehemence, led on or assisted by that strongly organized and widespread
    association called the Freemasons. No longer making any secret of their
    purposes, they are now boldly rising up against God Himself. They are
    planning the destruction of holy Church publicly and openly, and this
    with the set purpose of utterly despoiling the nations of Christendom, if
    it were possible, of the blessings obtained for us through Jesus Christ
    our Savior. Lamenting these evils, We are constrained by the charity
    which urges Our heart to cry out often to God: “For lo, Thy enemies have
    made a noise; and they that hate Thee have lifted up the head. They have
    taken a malicious counsel against Thy people, and they have consulted
    against Thy saints. They have said, ‘come, and let us destroy them, so
    that they be not a nation’.”

    …For as soon as the constitution and the spirit of the
    masonic sect

    were clearly discovered by manifest signs of its actions, by

    investigation of its causes, by publication of its laws, and
    of its rites

    and commentaries, with the addition often of the personal
    testimony of

    those who were in the secret, this apostolic see denounced
    the sect of

    the Freemasons, and publicly declared its constitution, as
    contrary to

    law and right, to be pernicious no less to Christendom than
    to the State;

    and it forbade any one to enter the society, under the
    penalties which

    the Church is wont to inflict upon exceptionally guilty
    persons. The

    sectaries, indignant at this, thinking to elude or to weaken
    the force of

    these decrees, partly by contempt of them, and partly by
    calumny, accused

    the sovereign Pontiffs who had passed them either of
    exceeding the bounds

    of moderation in their decrees or of decreeing what was not
    just. This

    was the manner in which they endeavored to elude the
    authority and the

    weight of the apostolic constitutions of Clement XII and
    Benedict XIV, as

    well as of Pius VII and Pius IX. Yet, in the very
    society itself,

    there were to be found men who unwillingly acknowledged that
    the Roman

    Pontiffs had acted within their right, according to the
    Catholic doctrine

    and discipline. The Pontiffs received the same assent, and
    in strong

    terms, from many princes and heads of governments, who made
    it their

    business either to delate the masonic society to the
    apostolic see, or of

    their own accord by special enactments to brand it as
    pernicious, as, for

    example, in Holland, Austria, Switzerland,
    Spain, Bavaria,
    Savoy, and

    other parts of Italy.

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