Latest Stories

Central bank opts to keep key rates steady

Gov’t: Inflation in check, investments on the rise


The Bangko Sentral ng Pilipinas on Thursday kept its key policy rates unchanged as it saw no need to make adjustments given the country’s benign inflation and robust economic growth.

The central bank’s overnight borrowing and lending rates remain at 3.5 and 5.5 percent, respectively.

The BSP likewise maintained the interest rate on special deposit accounts (SDAs) at 2 percent.

“The Monetary Board’s decision is based on its assessment of a benign inflation environment…. Domestic economic activity has also been growing at a solid pace, supported by firm demand and buoyant business sentiment,” BSP Governor Amando Tetangco Jr. on Thursday said in a briefing.

Reports showed that the rate of rise in consumer prices remained modest so far this year, staying below the low end of the government’s target.

The National Statistics Office earlier reported that annual inflation settled at a four-year low of 2.1 percent in August, bringing the average for the first eight months of the year to 2.8 percent.

The government wants to limit the rate of increase in consumer prices this year to within a range of 3 and 5 percent.

BSP Governor Diwa Guinigundo said in the same briefing that, based on the central bank’s latest simulations, inflation could average at 3 percent this year, 3.9 percent next year, and 3.5 percent in 2015.

Still, the BSP said it would closely monitor developments in Syria given the potential impact on domestic prices. The likelihood of a US military strike in Syria has caused global oil prices to rise.

Also, the modest rate of rise in consumer prices came about despite the economy’s robust growth.

BSP officials explained that rising investments somehow helped in minimizing the impact of a moderate rate of rise in consumer prices.

Unlike in the past when the country’s economic growth was driven largely by consumer spending, economic expansion last year and this year has been driven by investments from domestic firms.

Rising investments help boost the supply of goods and services, officials said, thereby tempering inflationary pressures brought on by rising consumer demand.

With inflation in check, officials said, the BSP sees no reason to raise interest rates. A hike in interest rates would have tempered demand for bank loans and eased the rise in consumer spending.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bangko Sentral ng Pilipinas , Inflation , Interest Rates , special deposit account (SDA)

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • 2 teenagers killed in Mlang, North Cotabato
  • No sympathy from North Korea over ferry disaster
  • 4 French journalists freed from Syria captors home
  • De Lima on Gigi Reyes: Let’s wait and see
  • South Korean relatives divided over whether to raise ferry
  • Sports

  • Pacquiao courtesy call to Aquino set for Monday
  • Nick Calathes suspension a reminder of supplement risk
  • Teague scores 28 as Hawks soar past Pacers in Game 1
  • Warriors beat Clippers in playoff opener
  • Pacquiao top Mayweather contender
  • Lifestyle

  • Britain’s baby Prince George visits Australian zoo
  • Noli Yamsuan, Cardinal Sin’s ‘official’ photographer: ‘I could smell the aftershave lotion of the Pope’
  • Simplifying and lightening life
  • Where to go for Easter night-out
  • Joe de Venecia visits the Queen Mother of Cambodia
  • Entertainment

  • Show-biz celebrities’ other choices of summer getaway
  • Why ‘Noah’ can’t dock his ark at Philippine theaters
  • Acclaimed artist goes wild while on holiday
  • Believing in this mermaid
  • Missing Xian
  • Business

  • Top-selling insurance agent opens her dream café
  • Connecting and transacting with one another
  • Building wealth for health
  • Why Mandaue Foam buys, rather than rents, space
  • A workplace of new possibilities
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Epiphany
  • Unpaid creditor vs distressed debtor
  • Moving on
  • From culinary desert to paradise
  • Response to China: ‘Usjaphil’
  • Global Nation

  • Asia seeks Obama’s assurance in territorial spats
  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Filipinos in US poised for success
  • Visas for priests and other faith leaders
  • DOH to continue tracking co-passengers of OFW infected with MERS virus
  • Marketplace