BSP keeps key policy rate at 6.5%

MANILA  -The Bangko Sentral ng Pilipinas kept its policy rate at 6.5 percent as the inflation outlook moderated over the policy horizon.

Based on the BSP’s latest projection, full-year inflation is expected at 6.1 percent in 2023, slightly better than thee 6.2 percent forecast in the last Monetary Board meeting on Oct. 26

Also, the BSP now expects inflation to settle at 4.4 percent in 2024 and 3.4 percent in 2025

Meanwhile, non-BSP forecasts match that of the central bank’s, based on a survey of economists and analysts done on Nov. 9 to 15. They also see the readout at 4 percent in 2024 and 3.5 percent in 2025.

“Nevertheless, the balance of risks to the inflation outlook still leans significantly toward the upside, notwithstanding the recent improvement in food supply conditions,” BSP Deputy Governor Francisco Dakila Jr. said in a press briefing.

“Looking ahead, the Monetary Board continues to deem it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes fully evident and inflation expectations are firmly anchored,” Dakila added.