NEW TAXES expected to be in place by next year will likely have a one-off impact on inflation, the Bangko Sentral ng Pilipinas (BSP) said, adding that such adjustments would not cause a sudden surge in commodity prices.
Jul 202017
Mar 102016
STRONG PUBLIC and private spending are expected to spur further growth, ruling out the need for additional stimulus, monetary authorities said during their first policy meeting for the year held last month.
Mar 082016
BENIGN INFLATION seen in February will allow the Bangko Sentral ng Pilipinas (BSP) to keep monetary policy settings unchanged during this month’s meeting, an economist from ING Bank NV said, as the markets also await fresh hints from the United States about the next “lift-off.”
Apr 102014
MANILA, Philippines – Despite the continued slowdown of inflation in March, the Bangko Sentral ng Pilipinas said it remains vigilant amid risks that could cause an uptick in the rise of commodity prices. “Clearly, while we see inflation falling within the target range this year and next, there are additional challenges to our operating environment this year relative to last year,” BSP Governor Amando M. Tetangco Jr. said in an e-mailed statement. Inflation eased for a second month to 3.9 percent in March on the back of lower price increases for housing, water, electricity, gas, and other fuels. This puts the three-month average to 4.1 percent, above the midpoint of the central bank’s three to five percent target range. “Inflation has slowed over the last two months. However, the upside risks to inflation that we have mentioned before still remain,” Tetangco said. “In particular, we note potential price pressures that could emanate from increases in power rates, higher food prices and potential volatility in oil prices are still present,” he added. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The uncertainty as to when supply-side pressures will dissipate also highlights the potential risk of second-round effects,” Tetangco noted. The BSP, mandated to keep prices stable, last month kept key policy rates stable amid inflation expectations seen falling within target. However, monetary authorities hiked banks’ reserve requirement (RR) ratio by one percent age point due to the sustained high domestic liquidity growth seen since July. “[W]e continue to be mindful Read More …
Mar 072014
THE POLICY-making Monetary Board is bullish on the country’s expansion, saying that the Philippines may record “above-trend growth”, but recognized that volatility in financial markets will remain a challenge in the near-term.
Dec 122013
MANILA, Philippines – The Bangko Sentral ng Pilipinas decided yesterday to keep its key policy rates steady amid a manageable inflation environment. The BSP’s overnight borrowing and lending rates were maintained at 3.5 percent and 5.5 percent, respectively. Interest rates on special deposit accounts facility and the reserve requirement ratios were also left unchanged. “The Monetary Board’s decision is based on its assessment that the inflation environment remains manageable,” BSP Governor Amando M. Tetangco Jr. said in a briefing. The country’s average inflation rate of 2.8 percent for the first 11 months of the year was still below the BSP’s full-year target range of three to five percent. “While inflation forecasts have slightly risen due to the recent increase in global oil prices, utility rate adjustments, and the impact of the recent typhoons, the future inflation path continues to be within the target over the policy horizon since the uptick is expected to be largely transitory,” he added. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “Market expectations of inflation remain consistent with the target range,” he added. The Monetary Board expects inflation to average 2.9 percent this year, slightly below its previous forecast of three percent announced in October. But the central bank hiked its 2014 inflation forecast to 4.5 percent from four percent on the back of higher oil prices, power adjustments and the impact of recent natural calamities. The 2015 inflation forecast, meanwhile, has been downgraded to 3.2 percent from 3.4 percent. The Monetary Board is Read More …
Oct 182013
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) may not need to adjust current policy settings until the first quarter of next year, a member of the central bank’s policy-making Monetary Board said yesterday. “There is no need to change policy settings and even SDA (special deposit accounts) rates for the rest of the year and probably until the first quarter of next year,” Felipe Medalla, a member of the Monetary Board, told reporters. Medalla explained that his view is on account of manageable inflation expectations despite expected uptick in domestic liquidity. “Inflation rate is now slightly below target and can inch up a bit as liquidity increases because of the SDA adjustments,” Medalla pointed out. Overnight borrowing and lending rates are at 3.5 percent and 5.5 percent, respectively, since the start of the year. The rates have been kept steady amid a robust economy that already expanded by 7.6 percent in the first half supported by a benign inflation environment. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Inflation has so far averaged 2.8 percent in the first nine months of the year, below the BSP’s target of three to five percent. The rate is expected to remain within target despite a foreseen rise in domestic liquidity due to adjustments in the central bank’s SDA facility. M3, the broadest measure of domestic liquidity, has been rising by more than 30 percent for July and August, owed to money flushed out of the SDA facility.
Oct 042013
MANILA, Philippines – The nationwide inflation rate picked up more than expected in September on higher prices of food, non-alcoholic beverages and utilities. In a report, the National Statistics Office (NSO) said the consumer price index rose 2.7 percent in September from a year earlier, the fastest in three months and picking up from a four-year low hit in August. Despite the acceleration, the latest figure is still within the Bangko Sentral ng Pilipinas’ forecast range of 1.9 to 2.8 percent for the month. Without food and oil prices, core inflation went up to 2.3 percent in September from 1.9 percent in August. “This reaffirms our assessment that inflation would remain manageable over the policy horizon, and that barring any unforeseen developments, policy settings continue to be appropriate,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters yesterday. ‘’The BSP will remain watchful of both local and global developments, including the impact of the resolution of the issues surrounding the US debt ceiling on financial market volatilities in the near term, and the real economy in the medium term,” he added. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Tetangco said the central bank is ready to adjust policy settings in line with keeping prices stable. “The BSP will adjust policy settings, as appropriate, consistent with our price and financial stability objectives,” Tetangco said. Since the start of the year, the Monetary Board has kept overnight borrowing and lending rates at 3.5 percent and 5.5 Read More …
Aug 182013
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) may tweak its 2015 inflation target of two to four percent in order to keep up with a foreseen volatile interest rate environment, the Bank of the Philippine Islands said. “In keeping with its desire to fulfill its dual mandate of price stability and financial stability, the BSP may consider widening its 2015 inflation target, a move that will be widely accepted by the market,” BPI Economics and Financial Markets Research said in a commentary. “BSP may resort to invoking flexibility and widen its inflation target to avoid a volatile interest rate environment, a scenario which could emerge with its pre-set 2015 inflation target of two to four percent,” it said. The bank explained the 2015 inflation target may be “incompatible” with the central bank’s preferred “middle-of-the-pack” stance for the peso. This “middle-of-the-pack” stance, which means the BSP is keeping the peso from veering away from the movement of other regional currencies, is seen to have a pass-through impact on inflation, the bank noted. “BSP’s more flexible exchange rate policy, embodied in their efforts to keep USD/PHP in the middle of the regional pack will likely lead to an upward adjustment in the BSP’s 2015 inflation target, which will in turn, enable monetary policy authority to keep interest rates stable in the next 18 months,” BPI said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The BSP sees inflation to fall within the three to five percent target this year Read More …
Apr 252013
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) kept its benchmark interest rate steady at a record low of 3.5 percent yesterday, while cutting the rate on special deposit account (SDA) by another 50 basis points to boost economic activity and contain the peso’s strength. Key policy rate was maintained at its record low of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending, but SDA rates were cut by 50 basis points to two percent across all tenors. The cut was “effective immediately,” BSP Deputy Governor and officer-in-charge Nestor Espenilla Jr. said. The central bank has eased rules on foreign exchange transactions to spur dollar buying and contain the peso’s strength as it expects more capital inflows after the country’s first-ever promotion to investment grade status in March, and with other rating agencies seen following suit later in the year or next year. SDAs are fixed-term deposits of banks and their trust departments with the central bank with maturities of one week, two weeks and one month. This was the third time SDA rates were cut, following reductions of 50 basis points each in January and March. “The Monetary Board’s decision to maintain the policy interest rates at their current levels is based on its assessment that the inflation environment is likely to remain manageable,” Espenilla told reporters. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Inflation is seen to settle at 3.2 percent this year, slightly lower than the 3.3 percent forecast in March Read More …