The Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, on Thursday kept the benchmark interest rates steady for the eleventh consecutive time since October 2014.
Bangko Sentral Governor Amando Tetangco Jr., who is also the chairman of the Monetary Board, said policy rates were retained at 4 percent for overnight borrowing and 6 percent for overnight lending.
“The Monetary Board’s assessment of manageable inflation dynamics and robust growth conditions continue to support steady monetary policy settings. Average inflation is projected to settle within the target range of 2 to 4 percent for 2016-2017, while inflation expectations remain firmly anchored within the inflation target band over the policy horizon,” Tetangco said.
He said the Monetary Board also noted that risks surrounding the inflation outlook had shifted slightly to the downside.
The board reduced the average inflation forecast for 2016 to 2.2 percent from the 2.4 percent estimate made in December 2015. The forecast for 2017 was maintained at 3.2 percent.
Bangko Sentral Deputy Governor Diwa Guinigundo said the board considered three factors before revising the 2016 forecast. These were the declining oil prices, reduction in jeepney fares from P7.50 to P7 and lower inflation.