Philippines maintains policy rates

Philippine monetary officials decided Thursday to keep policy interest rates steady on back of a manageable inflation outlook amid strong growth. The overnight borrowing rates or reverse repurchase facility ( RRP) is unchanged at 3.50 percent while overnight lending or repurchase facility (RP) is at 65.50 percent. The interest rates on terms RRPs, RPs and special deposit accounts were also left unchanged. The reserve requirement ratios were kept steady as well. Central Bank Governor Amando M. Tetangco Jr said that current monetary settings remain appropriate and the cumulative 100 basis point reduction in policy rates for this year continues to benefit the local economy. The country's economic managers expect the higher-than-expected 7.1 percent growth in the third quarter to continue for the rest of the year thanks to steady consumer spending. While this may lead to higher prices, Tetangco said financial woes in the United States and Europe will temper global sentiment and mitigate upward pressures on commodity prices. "The latest baseline forecasts follow a slightly lower path but remained within the lower bound of the target over the policy horizon," Tetangco said. Tetangco said they will continue to monitor price and output conditions to ensure that their monetary policy stance will keep prices stable and support growth.