Benjamin Diokno
The central bank on Tuesday said interest rates would remain at their low levels—despite the stronger-than-expected third quarter growth figures announced by the government —until it sees clearer evidence that the economic recovery is on firmer footing.
In a statement following the release of the latest gross domestic product numbers, Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno said the agency “will continue to be patient with its accommodative monetary policy stance to support the economy’s full recovery.”
The central bank has come under increasing pressure in recent weeks from critics to raise its key interest rate, currently at a historic low of 2 percent for its overnight borrowing rate, due to stubbornly high inflation.
The central bank chief said that the growth rate for the third quarter—which came in above BSP’s forecast of 6.2 percent—“increases the likelihood that the revised growth projection of 4 to 5 percent in 2021 would be exceeded.”
“Growth was broad based, except agriculture, which contracted largely due to severe weather disturbances,” Diokno said.
Household spending rose 7.3 percent, fixed capital investment jumped 16 percent and government spending rose 13.6 percent.
While net trade was negative as imports outgrew exports, the 13.2-percent increase in imports “should be seen in a positive light as a leading indicator of more robust economic activity in the near term,” he said.
On the production side, the services sector, which accounts for about 60 percent of GDP rebounded by 8.2 percent, and the industrial sector grew 7.9 percent.INQ