The Bangko Sentral ng Pilipinas kept its overnight borrowing rate unchanged at 4.50% and the overnight lending rate at 6.50%, and kept reserve requirements unchanged at 21%. The Bank said: “decision is based on its assessment that the inflation outlook continues to be manageable, with within-target headline inflation and well-contained inflation expectations. Latest baseline forecasts indicate that the annual inflation rates for 2011-2013 are likely to fall within the 3-5 percent target range. The Monetary Board also took into account the data showing subdued domestic economic activity in the third quarter, due to the weather-related slowdown in the expansion of the agricultural sector, weak global economy and concerns over Europe’s sovereign and banking sectors.”
The Philippine central bank also held the rate unchanged at its last meeting, and last raised its interest rate in May this year by 25 basis points to 4.50%, and increased reserve requirements by 100bps at its previous meeting. The Philippines reported annual consumer price inflation of 5.2% in October, 4.8% in September, compared to 4.7% in August, 4% in July, 4.7% in June, 4.5% in May and 4.3% in April. Inflation is currently tracking just outside the Bank’s inflation target range of 3%-5%.
