The Bangko Sentral ng Pilipinas kept its policy rates untouched on Thursday after an off-cycle rate hike in October and hinted at more tightening if required to steer inflation towards a target-consistent path.<\/p>\n
The Monetary Board, led by Governor Eli Remolona, maintained the target reverse repurchase rate at 6.50 percent.<\/p>\n
Accordingly, the interest rates on the overnight deposit and lending facilities were retained at 6.0 percent and 7.0 percent, respectively.<\/p>\n
“Guided by incoming data, the BSP remains prepared to resume monetary policy tightening as necessary to steer inflation towards a target-consistent path, in line with its price stability mandate,” the bank said.<\/p>\n
The board observed that keeping the policy rate steady at the current meeting will allow previous policy adjustments to continue to work their way through the economy<\/span>.<\/p>\n The bank had raised the policy rate by a quarter-point at an unscheduled meeting in October.<\/p>\n Although pent-up demand continues to diminish in the near-term, the rebound in the third quarter supports the assessment that the medium-term growth prospects remain largely intact, the board noted.<\/p>\n The Philippine central bank lowered its 2024 risk-adjusted inflation forecast to 4.4 percent from 4.7 percent, and 2025 inflation is projected at 3.4 percent, which was down from 3.5 percent. <\/p>\n Nonetheless, the bank said, “\u2026the balance of risks to the inflation outlook still leans significantly toward the upside”.<\/p>\n Despite the latest pause, BSP will remain ready to hike rates in the near term given its latest risk-adjusted inflation forecast of 4.4 percent for 2024, ING economist Nicholas Mapa said. <\/p>\n The economist said the currency is set to move sideways but benefit from the hawkish signals coming from the BSP.<\/p>\n With inflation likely to slow further over the coming months, the tightening cycle is now over, Capital Economics economist Gareth Leather said. <\/p>\n