The Philippine central bank kept its key interest rates unchanged on Thursday as inflation continues to be manageable.
The Monetary Board of the Bangko Sentral ng Pilipinas decided to maintain the overnight reverse repurchase rate at 3.00 percent and the overnight lending rate at 3.50 percent.
The central bank had reduced the reverse repurchase rate to 3 percent from 4 percent when it shifted to an interest rate corridor system on June 3.
"On balance, the assessment of recent new information continues to support keeping monetary policy settings unchanged," BSP said.
Gareth Leather, a senior Asia economist at Capital Economics continues to expect the policy rate to remain unchanged at 3.00 percent not just until the end of 2016, but through 2017 as well.
The economist said the downside risks, which had increased following the election of President Rodrigo Duterte earlier in the year, have risen further.
The reserve requirement ratios were likewise left unchanged. The outcome of the meeting came in line with expectations.
Inflation was forecast to settle slightly below the lower edge of the 2-4 target range in 2016, but it was projected to rise toward the mid-point of the target range in 2017 and 2018.
The bank said the overall balance of risks surrounding the inflation outlook remains tilted to the upside owing largely to the pending petitions for adjustments in electricity rates along with the proposed tax policy reform program.
Domestic economic activity is expected to remain firm, underpinned by solid private spending and investment, buoyant business and consumer confidence and adequate credit and domestic liquidity.
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