The Philippine central bank decided to maintain its key interest rates unchanged as policymakers said the current policy settings as appropriate given a manageable inflation environment.
The Monetary Board of the Bangko Sentral ng Pilipinas on Thursday maintained the overnight borrowing rate at 4.00 percent and the overnight lending at 6.00 percent. The reserve requirement ratios were also left unchanged.
The bank expects inflation to settle within the lower half of the target range of 2-4 percent in 2015-2016 and inflation expectations to remain firmly anchored.
The board also see ample domestic liquidity and higher public spending to support domestic economic activity in months ahead and sustain the economy’s momentum.
The prevailing monetary policy settings are appropriately calibrated to the outlook for inflation and domestic economic activity, the board said.
With the economy set to continue growing at a decent pace, the Philippines is unlikely to join in the region’s interest rate cutting cycle, Gareth Leather, an Asia economist at Capital Economics said. He expects policy rates to be left on hold for the remainder of the year.
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