Philippines holds policy rate steady as inflation appears in check

By Tali David

Minneapolis, April 19 - The Monetary Board of the Bangko Sentral ng Pilipinas decided to leave the policy rate unchanged at its most recent meeting in light of a favorable inflation environment, according to minutes of the bank meeting released on April 19.

The bank decided to maintain its overnight borrowing rate at 4% and its overnight lending rate at 6%. The reserve requirement ratios were kept steady as well.

Latest baseline forecasts continue to indicate that inflation will likely settle near the lower half of the 3% to 5% target range in 2012 and 2013, while inflation expectations have remained well anchored.

The board said that while global economic conditions remain fragile, prospects for overall domestic economic activity are gradually strengthening.

It also noted that the balance of risks to the inflation outlook now leans slightly toward the upside as oil prices have remained elevated and at risk from ongoing tensions in the Middle East as well as strong demand from emerging economies.

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