Monetary Board keeps policy rates

March 21, 2019

The Bangko Sentral ng Pilipinas ( BSP) on Thursday has kept the interest rate on the overnight reverse repurchase facility unchanged at 4.75 percent.

The interest rates on the overnight lending and deposit facilities were also held steady.

BSP Governor Benjamin Diokno said the decision of the Monetary Board is ''based on assessment that prevailing monetary policy settings remain appropriate.''

Latest baseline forecasts show inflation settling within the target range of 3.0 percent ± 1.0 percentage point for both 2019 and 2020, while inflation expectations continue to stabilize within the target band, the BSP said.

''Inflation pressures have eased further since the previous monetary policy meeting, reflecting mainly the decline in food prices amid improved supply conditions,'' the BSP said in a statement.

Meanwhile, the Monetary Board observed that overall prospects for domestic activity continue to be firm, supported by a projected recovery in household spending and the continued implementation of the government’s infrastructure program. However, there are risks to economic growth in 2019 if the current budget impasse in Congress is not resolved soon.

The Monetary Board said risks to the inflation outlook remained broadly balanced for 2019 even as it observed further risks could emerge from prolonged El Niño and higher-than-expected increases in global oil and food prices. DMS