Philippines maintains key policy rates

Philippine monetary officials decided on Thursday to keep policy interest rates unchanged as inflation remains manageable. The overnight borrowing or reverse repurchase (RRP) facility still stands at 3.50 percent while overnight lending or repurchase (RP) is at 5.50 percent. The interest rates on term RRPs, RPs and special deposit accounts were also kept steady. The reserve requirement ratios were left unchanged as well. The Philippine central bank said it expects inflation to average 2.9 percent this year, which is lower than the 3-5 percent government projection for 2013. "While inflation forecasts have slightly risen due to the recent increase in global oil prices, utility rate adjustments and the impact of recent typhoons, the future inflation path continues to be within the target over the policy horizon since the uptick is expected to be largely transitory," the central bank said. Monetary officials said, however, that they remain mindful of risks to inflation such as potential increases in food prices as well as pending petitions for higher utility rates. The central bank revised its inflation forecast for 2014 to 4.5 percent from the previous 4 percent. Inflation forecast for 2015 was downgraded to 3.2 percent from the previous 3.4 percent.