BSP maintains interest rates at record low

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) decided to keep benchmark interest rates at their current record low levels but cut Special Deposit Account (SDA) rates to encourage liquidity and support overall economic growth. 

At its policy rate setting meeting on Thursday, April 25, the policy making body of the Bangko Sentral ng Pilipinas (BSP) kept the interests at 3.5% for the overnight borrowing rate and 5.5% for the overnight lending rate to encourage consumers to spend and businesses to invest. 

Rates on all tenors of the SDA facility, however, were cut by 50 basis points to 2% effective immediately. Reserve requirement ratios were kept steady as well.

The BSP said in a statement that these moves was based on expectations that inflation will remain manageable.

“Uncertainty over the strength of the global economy and the relative firmness of the peso are the key downside risks to the broad outlook for prices. However, power rate adjustments and the possibility of a sustained surge in liquidity owing to strong capital inflows could push inflation higher as well,” the BSP said. – Rappler.com