14-12-2023 (MANILA) The Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, has opted to maintain its benchmark interest rate at 6.50 per cent for the second consecutive meeting, citing easing price pressures. However, the bank signaled that its policy stance will remain tight to ensure inflation returns to its target range.
According to a recent Reuters poll of 24 economists, all but one predicted that the central bank would leave its target reverse repurchase rate unchanged. One economist forecast a quarter-point hike.
During a press conference, BSP Governor Eli Remolona explained that the central bank deemed it necessary to maintain tight monetary policy settings. However, he emphasized that the bank is prepared to adjust its stance if necessary.
The Philippines’ annual inflation rate slowed to its lowest pace in 20 months in November, rising by 4.1 per cent compared to the previous month’s 4.9 per cent. This brought the average inflation rate over the 11-month period to 6.2 per cent, which remains outside the central bank’s target range of 2 per cent-4 per cent.
The central bank revised its risk-adjusted inflation forecast downward to 6.0 per cent for this year and to 4.2 per cent for next year.
