BSP keeps key policy rates unchanged

Amid still manageable inflation expectations, the Bangko Sentral ng Pilipinas kept its key policy rates steady at Governor Amando M. Tetangco Jr.’s penultimate Monetary Board meeting.

Tetangco told reporters yesterday that the Monetary Board—the BSP’s policymaking body that he chairs, maintained the policy rate or the overnight reverse repurchase facility at 3 percent, while also keeping the prevailing rates of the overnight lending and deposit facilities as well as the reserve requirement ratios.

“The Monetary Board’s decision is based on its assessment of manageable inflation. Latest baseline forecasts continue to be within the target range of 2-4 percent for 2017-2018,” Tetangco said.
“Market expectations likewise remain anchored on the inflation target over the policy horizon. At the same time, the Monetary Board observed that inflation had remained elevated due largely to the recent increases in food prices and underlying inflation pressures,” Tetangco added.

“The Monetary Board also noted that the balance of risks surrounding the inflation outlook remained tilted toward the upside, given the transitory impact of the proposed tax reform program as well as possible further adjustments in transport fares and electricity rates. Meanwhile, global economic prospects have improved,” he said.
“The Monetary Board emphasized that even amid external headwinds, the outlook for domestic economic activity remains intact owing to buoyant household consumption and private investment, increased government spending, ample liquidity, and sustained credit growth,” he said. —BEN O. DE VERA