Monetary Board keeps rates steady despite inflation at three-year high

November 9, 2017

The Monetary Board, policy-making body of the Bangko Sentral ng Pilipinas (BSP) decided to maintain the interest rate on the  overnight reverse repurchase (RRP) facility at 3 percent after it evaluated the outlook for inflation, which hit a three-year high in October, as "manageable."

The corresponding interest rates on the overnight lending and deposit facilities were also kept steady. The reserve requirement ratios were likewise left unchanged, the board said in a statement Thursday.

"The Monetary Board believes that prevailing monetary policy settings continue to be appropriate. The BSP will continue to monitor price and output developments for any risks to the inflation outlook and will adjust its policy settings as necessary to ensure stable prices and sustainable economic growth," it added.

"While inflation has trended higher due mainly to higher utility rates and fuel prices, latest forecasts continue to show the future inflation path staying within the government’s  3 percent ± 1 percentage point target range for 2018-2019, the board said.

The board said "balance of risks to the inflation outlook continues to lean toward the upside due to possible higher crude oil prices." DMS