Sun, 10 Dec 2023

MANILA, Nov. 16 (Xinhua) -- The Philippine central bank on Thursday opted to keep its target reverse repurchase at 6.5 percent and the interest rates on the overnight deposit and lending facilities at 6 percent and 7 percent, respectively.

"The latest projections indicate that the inflation outlook has moderated over the policy horizon," Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila told a press conference.

The BSP also adjusted downward its 2024 risk-adjusted inflation outlook to 4.4 percent from its previous outlook of 4.7 percent, and for 2025 to 3.4 percent from the previous projection of 3.5 percent.

"Supply-side inflation pressures continued to ease due in part to the national government's non-monetary interventions, as well as seasonal factors," Dakila said.

Nevertheless, he said the balance of risks to the inflation outlook still leans significantly toward the upside, notwithstanding the recent improvement in food supply conditions.

"Key upside risks are associated with the potential impact of higher transport charges, electricity rates, and international oil prices, as well as higher-than-expected minimum wage adjustments in areas outside (Metro Manila)," he said.

Meanwhile, he added that the impact of a weaker-than-expected global recovery and government measures to mitigate the effects of El Nino weather conditions could reduce the central forecast.

Given these considerations, Dakila said the monetary board noted that keeping the policy rate steady will allow previous policy interest rate adjustments, including the interest rate increase in October, to continue to work their way through the economy.

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