Philippines keeps policy rate at 4%, starts crisis measure phase-out

By Richard Connell

New York, March 11 - The Monetary Board of the Bangko Sentral ng Pilipinas left its overnight borrowing interest rate at 4% and announced plans to withdraw its crisis-relief measures at is meeting on Thursday, according to news release issued by the bank.

The board of the Philippines central bank assessed that the inflation outlook is manageable, projecting inflation remaining within the target range for 2010 and 2011, as demand pressures remain modest.

The board also looked at several indicators which show an increase in domestic activity, led by exports, which the board forecasts to improve further in step with the global economic recovery.

The board also stated that given the stability of the financial markets and ample liquidity, it was starting to "phase out" its crisis response measures with a series of moves, particularly by reducing the peso rediscounting budget to PHP 40 billion from PHP 60 billion and returning the non-performing loan ratio requirement to 2% from 10%.

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