BSP keeps benchmark interest rate at 6.25 percent as inflation slows

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<div class='embed-wrap'><figure data-feedback='fb:likes,fb:comments'><img alt='Banko Sentral ng Pilipinas (BSP) Governor Felipe Medalla during the Management Association of the Philippines Economic Briefing and Membership Meeting at the Bonifacio Hall of Shangri-La at The Fort, Taguig City on August 19, 2022. Jonathan Cellona, ABS-CBN News/File' src='https://sa.kapamilya.com/absnews/abscbnnews/media/2023/business/05/18/20220819-map-membership-meeting-jc-4.jpg' ><figcaption>Banko Sentral ng Pilipinas (BSP) Governor Felipe Medalla during the Management Association of the Philippines Economic Briefing and Membership Meeting at the Bonifacio Hall of Shangri-La at The Fort, Taguig City on August 19, 2022. Jonathan Cellona, ABS-CBN News/File</figcaption></figure></div>MANILA — The Bangko Sentral ng Pilipinas on Thursday kept the benchmark interest rate at its current level of 6.25 percent after inflation eased for 3 straight months. BSP Governor Felipe Medalla made the announcement during the central bank's Monetary Policy meeting. After hitting a 14-year high of 8.7 percent in January, inflation decelerated for 3 straight months, settling at 6.6 percent in April, from 7.6 percent in March and 8.6 percent in February. However, the inflation rate remains above the government's 2 to 4 percent target range."The monetary board deems it necessary to keep the policy at its current level over the near term," Medalla said.The BSP also lowered its inflation forecast to 5.5 percent from 6 percent for 2023 and 2.8 percent from 3.1 percent in 2024.Medalla said inflation is expected to decline to within 2 to 4 percent on a monthly basis as early as September this year.The BSP, however, noted several risks to inflation such as the potential impact of El Niño on food prices and utility rates, adjustments in transportation fares and wages.When asked if another rate hike is possible this year, Medalla said it would depend on inflation as well as the adjustments of the US Federal Reserve.BANK RESERVE CUT EYEDBut Medalla said the monetary board also remained committed to its earlier pronouncement of reducing the country's reserve requirement ratio (RRR) for banks. "After the latest pause in local policy rates, the markets are now anticipating a possible cut in banks’ reserve requirement ratio (RRR), as early as June 2023, as signaled recently, as one of the options to ease monetary policy other than a local policy rate cut especially if there is no Fed rate cut yet by then," RCBC Chief Economist Michael Ricafort said."Any cut in large banks' reserve requirement ratio (RRR), from the current 12 percent could be possible, especially if inflation stabilizes further in the coming months," he added.Ricafort said every 1 percentage point cut in the RRR is equivalent to P130 billion infused in the financial system that could increase funds for lending.The current RRR at 12 percent has been described as among the highest in the region.<ul class='op-related-articles'>	<li><a href='https://news.abs-cbn.com/business/05/05/23/inflation-eases-further-to-66-percent-in-april'>Inflation eases further to 6.6 percent in April</a></li>	<li><a href='https://news.abs-cbn.com/business/03/23/23/bangko-sentral-hikes-benchmark-by-25-bps-to-625-percent'>Bangko Sentral hikes benchmark by 25 bps to 6.25 percent</a></li></ul><figure class='op-interactive'><iframe allow='autoplay; fullscreen' frameborder='0' height='100%' id='ivsplayer01' scrolling='no' src='https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&key=e8c22c015ca9eafa76f1e3edfa03c603&spid=3001339&vid=2620432' width='100%'></iframe></figure><div class='iwantbar'>Watch more News on <a href='https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news' target='_blank'>iWantTFC</a></div>

"The monetary board deems it necessary to keep the policy at its current level over the near term," Medalla said.The BSP also lowered its inflation forecast to 5.5 percent from 6 percent for 2023 and 2.8 percent from 3.1 percent in 2024.Medalla said inflation is expected to decline to within 2 to 4 percent on a monthly basis as early as September this year.The BSP, however, noted several risks to inflation such as the potential impact of El Niño on food prices and utility rates, adjustments in transportation fares and wages.When asked if another rate hike is possible this year, Medalla said it would depend on inflation as well as the adjustments of the US Federal Reserve.BANK RESERVE CUT EYEDBut Medalla said the monetary board also remained committed to its earlier pronouncement of reducing the country's reserve requirement ratio (RRR) for banks. "After the latest pause in local policy rates, the markets are now anticipating a possible cut in banks’ reserve requirement ratio (RRR), as early as June 2023, as signaled recently, as one of the options to ease monetary policy other than a local policy rate cut especially if there is no Fed rate cut yet by then," RCBC Chief Economist Michael Ricafort said."Any cut in large banks' reserve requirement ratio (RRR), from the current 12 percent could be possible, especially if inflation stabilizes further in the coming months," he added.Ricafort said every 1 percentage point cut in the RRR is equivalent to P130 billion infused in the financial system that could increase funds for lending.The current RRR at 12 percent has been described as among the highest in the region.<ul class='op-related-articles'>	<li><a href='https://news.abs-cbn.com/business/05/05/23/inflation-eases-further-to-66-percent-in-april'>Inflation eases further to 6.6 percent in April</a></li>	<li><a href='https://news.abs-cbn.com/business/03/23/23/bangko-sentral-hikes-benchmark-by-25-bps-to-625-percent'>Bangko Sentral hikes benchmark by 25 bps to 6.25 percent</a></li></ul><figure class='op-interactive'><iframe allow='autoplay; fullscreen' frameborder='0' height='100%' id='ivsplayer01' scrolling='no' src='https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&key=e8c22c015ca9eafa76f1e3edfa03c603&spid=3001339&vid=2620432' width='100%'></iframe></figure><div class='iwantbar'>Watch more News on <a href='https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news' target='_blank'>iWantTFC</a></div>

BSP Governor Felipe Medalla made the announcement during the central bank's Monetary Policy meeting. After hitting a 14-year high of 8.7 percent in January, inflation decelerated for 3 straight months, settling at 6.6 percent in April, from 7.6 percent in March and 8.6 percent in February. However, the inflation rate remains above the government's 2 to 4 percent target range.

<div class='embed-wrap'><figure data-feedback='fb:likes,fb:comments'><img alt='Banko Sentral ng Pilipinas (BSP) Governor Felipe Medalla during the Management Association of the Philippines Economic Briefing and Membership Meeting at the Bonifacio Hall of Shangri-La at The Fort, Taguig City on August 19, 2022. Jonathan Cellona, ABS-CBN News/File' src='https://sa.kapamilya.com/absnews/abscbnnews/media/2023/business/05/18/20220819-map-membership-meeting-jc-4.jpg' ><figcaption>Banko Sentral ng Pilipinas (BSP) Governor Felipe Medalla during the Management Association of the Philippines Economic Briefing and Membership Meeting at the Bonifacio Hall of Shangri-La at The Fort, Taguig City on August 19, 2022. Jonathan Cellona, ABS-CBN News/File</figcaption></figure></div>MANILA — The Bangko Sentral ng Pilipinas on Thursday kept the benchmark interest rate at its current level of 6.25 percent after inflation eased for 3 straight months.

The Bangko Sentral ng Pilipinas on Thursday kept the benchmark interest rate at its current level of 6.25 percent after inflation eased for 3 straight months. 

BSP keeps benchmark interest rate at 6.25 percent as inflation slows | ABS-CBN News

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BSP keeps benchmark interest rate at 6.25 percent as inflation slows

BSP keeps benchmark interest rate at 6.25 percent as inflation slows