MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has maintained at record low the overnight borrowing and lending rates at 3.5% and 5.5%, respectively.
At its latest policy rate-setting meeting on Thursday, December 13, the Monetary Board kept the rates, which are benchmarks for commercial lending, at their current levels to boost economic activity and protect the Philippines from global headwinds.
"The Monetary Board is of the view that the manageable inflation outlook and robust domestic growth support keeping policy settings steady," BSP Governor Amando Tetangco, Jr. said in a briefing on Thursday, December 13.
"Going forward the BSP will continue to monitor evolving price and output coditions to ensure that the monetary policy stance remains consistent with ensuring stable prices while supporting economic growth," he added.
The BSP said its decision to maintain interest rates are also in line with expectations that global economic growth will remain stable in the medium-term and that the current interest rates remain appropriate for the Philippine economy.
In line with the BSP's decision to maintain prevailing interest rates, the Development Budget Coordination Committee (DBCC) has also maintained its inflation target of 3% to 5% for next year and 2014.
The DBCC, however, decided to reduce its inflation target for 2015 and 2016 to 2% to 4%. Initially, the DBCC estimates inflation at 3% to 5% during the entire term of President Aquino.
"The government decided to reduce the medium-term inflation target for 2015 to 2016 to be consistent with the desired disinflation path over the medium term, favourable trends in the structure of inflation, and expected higher capacity of the economy for growth under a low inflation environment," the BSP said. - Rappler.com
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