Bangko Sentral ends interest rate, reserve requirement cutting for 2019

ABS-CBN News

Posted at Nov 04 2019 11:43 AM | Updated as of Nov 04 2019 02:55 PM

Bangko Sentral ng Pilipinas’ (BSP) governer Benjamin Diokno at work shortly after an interview with Cathy Yang for ANC’s The Boss, held at the BSP headquarters in Manila on March 12, 2019. George Calvelo, ABS-CBN News/File

MANILA -- Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Monday signaled an end to monetary policy easing for the year, with inflation and economic growth within target.

The central bank will "pause for a while" after slashing the benchmark interest rate by 75 basis points, bringing it to 4 percent, and reducing the reserve requirement ratio for banks to 14 percent, Diokno told ANC.

"There will be no policy cuts this year and no more relaxation of the reserve requirement," Diokno said.

Diokno said the economy likely grew 5.8 to 6 percent in the third quarter, buoyed by state spending. Growth in the fourth quarter could accelerate to 6.5 percent, bringing the full year average to "close to 6 percent," compared to the government target of 6 to 7 percent. 

The immediate passage of the second round of tax reforms aimed at corporate duties will help attract more investments, he said. 

"We are still forecasting close to 6 [percent], that’s the low end of the GDP target. That’s good enough. Still one of the fastest growing economy. The Philippines will still be one of the fastest growing economy in the world," he said. 

The Philippines is in a "very good position" to hit the lower end of the 6 percent to 7 percent growth target range, Finance Secretary Carlos Dominguez said on the sidelines of the ASEAN Summit in Thailand.

Inflation likely settled at 0.5 to 1.3 percent in October, the BSP's Department of Economic Research earlier said. Diokno said it could settle below 1 percent.

Average inflation could come in at 2.5 percent for the full year as oil prices go down, with the African swine fever outbreak likely to have only a "minimal" effect, he said.

-- with a report from Vivienne Gulla, ABS-CBN News

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