THE Monetary Board of the Bangko Sentral ng Pilipinas (BSP) kept policy rates unchanged on Thursday, Feb. 13, after three consecutive rate cuts last year.
In a briefing at the BSP office in Manila, Governor Eli Remolona Jr. said the Monetary Board decided to keep the central bank’s target reverse repurchase rate at 5.75 percent.
The interest rates on the overnight deposit and lending facilities will also remain at 5.25 percent and 6.25 percent, respectively.
“Inflation expectations remain within the target range,” said Remolona.
The BSP’s risk-adjusted inflation forecast for 2025 was changed to 3.5 percent from 3.4 percent in the previous meeting in December.
For 2026, the risk-adjusted forecast is unchanged at 3.7 percent.
“The risks to the inflation outlook have become broadly balanced for 2025 and 2026. Nonetheless, upside pressures are seen to come from the utilities sector. The impact of lower import tariffs on rice remains the main downside risk to inflation,” said Remolona.
He said domestic growth prospects also continue to be firm but uncertainty over global economic policies and their impact on the domestic economy significantly increased.
Most economists earlier projected a 25 basis points rate cut during today’s meeting.
Remolona, however, said the BSP’s decision takes into consideration the current global uncertainties.
“I think we need a little bit of time to I guess I would say recalibrate our models. We are facing an unusual phenomenon in terms of the uncertainty of policies that will be put in place and our models don’t capture those things really well. So we have to redo our models and try to capture… the uncertainty itself has an effect and that is not in our models,” he said.
Remolona said that uncertainty about the outlook for inflation and growth warrant is keeping monetary policy settings steady.
“Before deciding on the timing and magnitude of further reductions in the policy interest rate, the Monetary Board deems it prudent to await further assessments of the impact of global policy uncertainty and the potential effects of the actual policies,” he said.
Remolona assured that the BSP will remain data-dependent in ensuring price stability that is conducive to sustainable economic growth and employment. (PNA)
