BSP still have policy space -– Tetangco
February 7, 2012 11:11 pm
MANILA, Feb 7 – The Bangko Sentral ng Pilipinas (BSP) remains confident that it still has policy space after inflation last January stayed within the central bank’s target range.
The National Statistics Office (NSO) reported Tuesday the 3.9 percent rate of price increases last January, within the BSP’s 3.6-4.5 percent projection for the month.
“This supports our view that inflation remains manageable over the policy horizon, and affirms we continue to have policy space should the need to support growth persist,” BSP Governor Amando Tetangco Jr. told reporters in a mobile text message.
The central bank chief stressed that monetary officials “will be watchful of developments, particularly the weather-related events in the Visayas, to see their impact on the food supply chain.”
“We will also continue to monitor global developments and their impact on our own domestic inflation dynamics,” he added.
Central bank’s policy-making Monetary Board (MB) last month slashed by 25 basis points the BSP’s policy rates to support expansion of the domestic economy given the benign inflation outlook.
To date, central bank’s overnight borrowing rate is at 4.25 percent and the overnight lending rate is at 6.25 percent.
The cut in BSP’s policy rates last month is the first since July 2009 and was made after the Board maintained these rates in the past six consecutive policy meetings.
The last time monetary officials implemented a rate cut was in July 2009 when it decreased by 25 basis points the policy rates to spur growth on back of within target inflation outlook until 2010 and weaker global economic activity.
That time, the overnight borrowing rate was lowered to four percent and the overnight lending rate to 6.25 percent. (PNA) DCT/JS/utb
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