BSP key rate remains at 6.25%

MANILA  -The Monetary Board on Thursday continued to keep the Bangko Sentral ng Pilipinas key policy rate at 6.25 percent, saying that the latest baseline projections show a slightly higher inflation path.

This is the fourth MB policy meeting in a row that the benchmark rate is unchanged — after the ones held in May, June and August — and followed a similar move by the United States Federal Reserve that was announced earlier in the day

MB Chair and BSP Governor Eli Remolona Jr. said in a press briefing that the average inflation is now seen to reach 5.8 percent in 2023 from 5.6 percent previously, while the forecast for 2024 likewise rose to 3.5 percent from 3.3 percent.

READ: Philippine inflation rose to 5.3% in August

The BSP’s decision comes after the US Federal Reserve announced it was keeping its rates steady at the end of its two-day meeting on Wednesday.

READ: Fed keeps rates steady, toughens policy stance as ‘soft landing’ hopes grow

“The balance of risks to the inflation outlook remains skewed toward the upside. The major upside risks to the inflation outlook are the potential impact of further adjustments in transport fares and electricity rates,” Remolona said.

“At the same time, the Monetary Board noted that recent indicators of domestic economic activity pointed to waning pent-up demand, even as the impact of prior monetary policy tightening continues to weigh on credit,” he added.