MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said there is more room to keep interest rates steady until the end of the year on the back of benign inflation and slower-than-expected economic growth.
BSP Governor Amando M. Tetangco Jr. said in a text message to reporters that the current policy stance of the central bank remained appropriate as inflation remained manageable.
“Right now, policy settings are appropriate. Inflation outllook is manageable. Barring inflation surprises from supply disruptions due to regional natural disasters, we can keep rates steady for the near-term,” he stressed.
The next policy rate setting meeting of the BSP is scheduled on Dec. 1. This is also the last policy rate setting meeting of the central bank this year.
So far, inflation averaged 4.3 percent in the first nine months of the year from 4.1 percent in the same period last year despite rising to 4.6 percent in September from 4.3 percent in August.
The BSP believes inflation would average between 4.5 percent and 5.4 percent for October due to higher food prices brought about by the supply disruption caused by typhoon Pedring as well as the imposition of the 12-percent value added tax on toll rates.
Tetangco said monetary authorities would continue to monitor both global and domestic developments particularly the impact of supply disruptions caused by natural calamities.
“But we continue to monitor developments – the process and speed of the resolution of the debt crisis in Europe, policy responses in other advanced economies to deal with unemployment, growth and inflation prospects in China, supply disruptions from natural disasters,” he added.
According to him, the BSP would act swiftly to curb inflationary pressures by adjusting its policy stance.
“We watch the interplay of these factors to see how these would tip the balance of risks to inflation. We will adjust swiftly as necessary,” he said. - By Lawrence Agcaoili
