BSP seen maintaining current policy settings

Monetary policy settings remain appropriate for now, central bank officials said, adding that measures implemented last year seemed enough to tide the economy over after the US Federal Reserve hikes rates later in 2015.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said banks continued to lend money to homes and businesses at a healthy pace, and the amount of money in the economy remained ample to support growth.

“Remember we took tightening measures last year,” Tetangco said, referring to hikes in bank reserve requirements, overnight borrowing and lending rates, and interest on special deposit accounts (SDA). All measures aimed to control money supply growth and quell inflationary pressures.

“Those haven’t been unwound, and they’re still there. We’re in a good position,” Tetangco said. He said the BSP still expects inflation to average within the target range of 2 to 4 percent in 2015 and 2016.

Despite the confidence in current policy settings, he said the BSP was prepared to act if needed.

At the moment, Tetangco said the central bank had its eyes on three different brewing issues overseas, namely Europe and Greece’s debt woes, China’s financial market turmoil, and the US Fed’s planned tightening of policy settings.