Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Banking

Philippine central bank holds rates at record low, signals no change anytime soon

Philippine central bank holds rates at record low, signals no change anytime soon

By Neil Jerome Morales and Karen Lema

MANILA (Reuters) -The Philippine central bank left its key interest rate steady at a record low on Wednesday, as policymakers focus on supporting an economy which is showing signs of recovering after shrinking for five consecutive quarters.

The Bangko Sentral ng Pilipinas (BSP) kept the rate on the overnight reverse repurchase facility at 2.0% for a fourth consecutive meeting, as predicted by all 13 economists in a Reuters poll.

The rates on the overnight deposit and lending facilities were also held steady at 1.5% and 2.5%, respectively.

The BSP’s decision comes on the heels of Tuesday’s data showing the economy contracted more than expected in the first quarter, although sequential growth momentum pointed to an emerging recovery.

“On balance, the expected path of inflation and downside risks to domestic economic growth warrant keeping monetary policy settings steady,” BSP Governor Benjamin Diokno told a news briefing.

Diokno said the risks to the inflation outlook were broadly balanced, with both averages for this year and next seen settling within the 2%-4% target band.

The BSP lowered its inflation forecast for this year to 3.9%from 4.2% previously. For 2022, inflation is seen averaging 3.0%, up from the previous forecast of 2.8%.

Diokno signalled no change in policy settings anytime soon, saying that “sustained support for domestic demand remains a priority for monetary policy.”

Despite elevated inflation mainly driven by tight pork supply, some economists expect the BSP to stand pat for the rest of 2021, while others have not ruled out a further easing.

“Provided inflation does begin to fall back later in the year, then rate cuts are likely in the second half of the year,” said Capital Economics’ Asia economist Alex Holmes.

The Philippines, which suffered a record 9.6% economic contraction last year, is battling one of Asia’s worst coronavirus outbreaks with more than a million cases recorded and roughly 18,700 deaths.

A new surge in COVID-19 cases starting in March had prompted the reimposition of stricter mobility curbs, and Diokno warned that infections “pose substantial downside risk to domestic demand”.

On Wednesday, President Rodrigo Duterte ordered all agencies in the executive department to identify savings from their budgets to augment badly-needed funds for the government’s pandemic relief measures.

A slow rollout of COVID-19 vaccinations has also raised risks of a more prolonged period of economic weakness.

Michael Ricafort, economist at Rizal Commercial Banking Corp, said the local economy “still needs to get all the support measures that it can get amid limited funds for any additional stimulus measures”.

(Additional reporting by Enrico Dela CruzEditing by Shri Navaratnam and Jacqueline Wong)

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post