The Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, kept the benchmark interest rates steady Thursday given the manageable inflation environment and strong economic growth prospects.
The interest rates of 3.5 percent for overnight lending, 3 percent for overnight borrowing and 2.5 percent for overnight deposits were also left steady. The reserve requirement ratios were also maintained.
Bangko Sentral Deputy Governor Nestor Espenilla Jr. said the board’s decision was based on an assessment of inflation dynamics and the risks to the inflation outlook over the policy horizon.
“While inflation has risen due to the recent increases in food and oil prices, latest baseline forecasts continue to indicate that the future inflation path will remain within the target range of 2 to 4 percent for 2017 to 2018,” Espenilla said.
He said the balance of risks surrounding the inflation outlook continued to be weighted toward the upside, given possible adjustments in electricity rates and the initial impact of the government’s broad fiscal reform program.
Inflation accelerated to a two-year high of 2.7 percent last month from 2.6 percent in December 2016.
