Monetary Board keeps policy rates unchanged

December 14, 2017

The Monetary Board, the policymaking of the Bangko Sentral ng Pilipinas (BSP) kept the policy rates after its meeting on Thursday.

The overnight reverse repurchase rate remains 3 percent and overnight lending rates were kept at 3.5 percent. These rates have stood pat since June 2016.

"The Monetary Board's decision is based on its assessment that the outlook for the inflation environment has been broadly unchanged," a statement from the BSP said.

"This is indicated by latest baseline forecasts remaining within the target range of 3.0 percent +- 1 percentage point for 2018 to 2019," the BSP added.

Inflation for November declined to 3.3 percent from 3.5 percent in the previous month.

Risks to higher prices "remains to tilted toward the upside due in part to possible higher crude oil prices, the central bank said.

It added that while "there may be potential transitory effects on consumer prices from the proposed tax reform program, various mitigation measures and the resulting improvement in output and productivity are also expected to temper the impact on inflation over the medium term."

The central bank said it will "remain vigilant against any risks to the inflation outlook and will adjust its policy settings as  needed to ensure that future inflation remains consistent with the medium term target while being supportive of sustainable economic growth." DMS