People visit stalls in Divisoria in Manila on March 20, 2021, the same day health authorities tallied 7,999 cases of COVID-19, the highest so far. George Calvelo, ABS-CBN News/File
MANILA - The Bangko Sentral ng Pilipinas on Thursday kept its benchmark rate unchanged as it pledged to support economic recovery.
The overnight reverse repurchase facility, used by banks to price loans, was kept at its record low of 2 percent as the Philippines grapples with a new surge in COVID-19 cases that threatens economic recovery.
Thirteen economists polled by Reuters expected the BSP to keep interest rates at the current level.
“The central bank has done a lot of heavy-lifting in 2020… It has forcefully brought down interest rate, doing all it can to resuscitate the economy in 2020,” BDO Unibank chief market strategist Jonas Ravelas told ANC.
“To further support the economy, we need to be able to do fiscal stimulus which means the government should eventually spend,” he added.
BSP Governor Benjamin Diokno earlier said inflation remains manageable despite its "transitory" upward trend. Diokno said the central bank was on guard against second-round effects that could further push inflation up.
Inflation quickened to 4.7 percent in February, its highest in more than two years, government data showed.
Economic managers earlier pointed out that easing COVID-19 restrictions and the vaccination plan rollout would drive positive growth in the second quarter this year.
However, the National Capital Region, Bulacan, Cavite, Laguna and Rizal were again placed under general community quarantine with additional restrictions until April 4 to slow down the recent surge in new cases.
ANC, ANC Top, COVID-19 pandemic, COVID-19, BSP, interest rate, overnight reverse repurchase facility, bank loans, Benjamin Diokno