BSP keeps key rates unchanged

MANILA, Philippines (Xinhua) – The Banko Sentral ng Pilipinas today has decided to keep its low interest rate environment as inflation remains at a manageable level.

Benchmark interest rates for overnight borrowing and overnight lending remains unchanged at 4 percent and 6 percent, respectively. The Philippines has kept policy rates steady since July 2009.

“In deciding to keep the key policy rates steady, the Monetary Board noted that prevailing price and output conditions suggest that the stance of monetary policy continues to be appropriate for the time being. Core inflation has been stable and inflation expectations have so far remained manageable,” the central bank said in a statement.

The central bank said inflation forecasts continue to be within the target range of 3 to 5 percent for 2011 and 2012. Moderate growth in credit and liquidity is also expected to limit supply shocks. Sufficient food supply in the domestic market will also keep food prices stable. This even if a global grains shortage is spiking prices worldwide.

But the Monetary Board acknowledges that global food shocks and rising world oil prices present a risk to the country’s inflation outlook. –(philstar.com)