MANILA - The Philippine central bank on Thursday cut the interest rate it pays on its short-term special deposit accounts (SDA) after the facility consistently attracted huge volume of funds which otherwise could have been used by banks for lending.
The central bank said it will now pay 3.0 percent for all
SDA tenors. Before the move, it was paying 3.53125 percent for 7-day term, 3.59375 percent for the 2-week tenor, and 3.65625 percent for the 32-day term.
The monetary authority also tweaked its inflation forecasts. It now expects 2013 average inflation at 3.0 percent, a shade lower than its previous 3.1 percent estimate. It also forecast average inflation in 2014 at 3.2 percent, higher than a previous 2.9 percent estimate.