Bangko Sentral keeps SDA, key rates steady


The Bangko Sentral ng Pilipinas on Thursday kept the interest rates on special deposit accounts (SDAs) as well as those for its overnight borrowing and lending unchanged.

The SDA rate remains at 2 percent, while the overnight borrowing and lending rates are still at 3.5 and 5.5 percent, respectively. All rates are the lowest recorded.

With the decision, the BSP effectively took a pause from slashing the SDA rate since the start of the year. The central bank reduced the SDA rate three times since January by a total of 150 basis points.

The BSP decided to cut the SDA rate to encourage the development of the country’s capital markets and boost lending to enterprises.

Monetary officials at the time hoped that the funds to be withdrawn from the SDA facility would be used by market players to lend more to businesses and create new investment products.

Apart from the cuts in the SDA rate, other regulations were likewise implemented earlier to encourage banks to take their funds out of the SDA facility. One such directive is to disqualify funds placed in investment management accounts from being invested in the SDA.

In the first quarter, bank lending grew by a double-digit pace while the economy, measured in terms of gross domestic product, expanded year-on-year by a robust 7.8 percent. This was the fastest growth rate in Asia, exceeding even China’s 7.7 percent.

Citing these developments, the BSP said it would first let the economy absorb the effects of the prior rate cuts before making any further move related to interest rates.

By keeping the policy settings steady, the BSP may get “to assess the impact of recent fine-tuning in monetary operations,” BSP Governor Amando Tetangco Jr. said in a press conference yesterday immediately after the policy-setting meeting of the central bank’s Monetary Board.

The BSP remains committed to keeping inflation in the country manageable and within target, Tetangco said. The government expects inflation to settle between 3 and 5 percent for this year and the next.

“The Monetary Board is of the view that the manageable inflation outlook and robust domestic growth provide scope to keep policy rates steady for the time being…. The BSP will continue to pay close attention to evolving price and output conditions as well as market developments to ensure that policy settings remain consistent with safeguarding price and financial stability while being supportive of sustained and balanced economic growth,” he said.

In the first five months of the year, inflation averaged at 3 percent, the National Statistics Office earlier reported.

BSP Deputy Governor Diwa Guinigundo said that, based on the latest central bank estimates, inflation would likely average at 3.1 percent in 2013, 3.6 percent in 2014, and 3.4 percent in 2015.

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  • joboni96

    napaka inutile ang bsp na ito

    nagsasayang na ng pera sa budget deficit nila
    hinaharangan pa paggamit sa foreign reserves

    to retire all government foreign debt that will result in
    additional p400 bilyones per year on loan savings

    tapos ngayong nabigla sa money pullout
    ng mga dayuhang carpetbaggers

    market correction daw
    olol – natutulog sa pansitan

    pero tuloy matataas na sweldo
    buwagin na mga ito

    • Eddwardd

      indeed, little learning is a very dangerous thing…

      go back to school and study finance, banking and how the central banks work and other related stuff…

      advise: don’t bring your political orientation and ignorance in the world we call banking and finance and economics…

      • wysiwyg81

        gives me goose bumps when i read such kind of a response, most especially on such a highly intellectual topics such as, but not limited, to that of the operations, work, and people of the central bank. even under the guise of anonymity, it cannot be denied how poor this commenter’s knowledge is, not to mention a glaring reflection of lack of decent education. the commenter’s ignorance is disgusting.

        new york-based business magazine global finance has named governor amando tetangco jr. of the bangko sentral ng pilipinas one of the best central bank heads in the world for 2012, giving him a grade of “A” together with five others.

        other central bank heads who were likewise given an “A” for this year by global finance were glenn stevens of australia, mark carney of
        canada, stanley fischer of iIsrael, zeti akhtar aziz of malaysia and fai-nan perng of taiwan. please note that the head of the us federal reserve (us central bank) ben bernanke did not make the list.

        this is the fourth time that tetangco was given the highest grade by the international publication in its annual scorecards for central bank leaders. he also got an “A” in 2010, in 2007 and in 2006. now hows that for performance?

        as a filipino citizen, i’m truly proud of our central bank governor not only for his intellect and wisdom, but most especially his leadership in our local banking industry. remember that during the us economic meltdown brought about by the us sub-prime mortgage fiasco, the philippines survived it because of tetangco’s leadership and management skills in the banking industry.

        makes me puke to read what we both have read above.

      • joboni96

        of course
        his globalist masters

        applaud the good job he is doing
        for their globalist cause

        not for the pilipino nation

      • joboni96

        talagang kolonisadong utak ka

        slave of the globalists
        traitor to national interests

        may mba ako boy
        pati masters sa rural areas

        you prove your word right
        your pequeno estudio moy peligroso

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