Philippine Central Bank Holds Key Rates

(RTTNews) - The Bangko Sentral ng Pilipinas kept its policy rates unchanged on Thursday citing slowing inflation.

The Monetary Board, led by Governor Eli Remolona, retained the target reverse repurchase rate at 6.50 percent.

Accordingly, the interest rates on the overnight deposit and lending facilities were maintained at 6.0 percent and 7.0 percent, respectively.

In January, inflation eased to a 39-month low of 2.8 percent from 3.9 percent in December.

The central bank said risk-adjusted inflation outlook for 2024 slowed to 3.9 percent from 4.2 percent. For 2025, the risk-adjusted inflation projection was relatively steady at 3.5 percent from 3.4 percent, the bank said.

The bank noted that economic growth momentum remained intact over the medium term. That said, recent indicators suggest that economic activity could moderate in the near-term due to the past monetary policy tightening.

With inflation likely to stay low and headwinds to the economic recovery mounting, the central bank is set to trim interest rates around the middle of the year, Capital Economics' economist Gareth Leather said.