Philippine Central Bank Maintains Policy Rate Stable At 6.25%

(RTTNews) - The Bangko Sentral Ng Pilipinas left its key rate unchanged for the third straight meeting on Thursday to allow for a moderation of inflation despite the growing risks to the outlook.

The Monetary Board decided to maintain the interest rate on the overnight reverse repurchase facility at 6.25 percent, the BSP said.

The previous rate change was a 25 basis point hike in March.

Interest rates on the overnight deposit and lending facilities were kept at 5.75 percent and 6.75 percent, respectively.

Recent official data showed that consumer price inflation eased to a 16-month low of 4.7 percent in July from 5.4 percent in June.

Nonetheless, inflation was still above the central bank's target range of 2 to 4 percent.

The latest baseline projections continue to show a return to the inflation target in the fourth quarter of this year despite a generally higher path for inflation, reflecting mainly the impact of higher international oil prices, the bank said in a statement.

Current forecasts predict that inflation will reach 5.6 percent this year, while inflation will be 3.3 percent next year and 3.4 percent in 2025, respectively.

The bank observed that a broad-based slowdown in domestic demand resulted in a weaker GDP outturn in the second quarter, indicating a challenging outlook for economic growth.

Given these considerations, the Monetary Board deemed it appropriate to maintain monetary policy settings to allow a moderation of inflation even as authorities continue to assess the emerging risks to the inflation outlook.