Philippines: Central Bank cuts interest rate to 4.00%
March 1, 2012
At its 1 March monetary policy meeting, the Central Bank cut the benchmark interest rate by 25 basis points to 4.00%. The decision was expected by market participants and followed a similar move in January, when the Bank reduced interest rates by quarter of a percentage point. The Bank's decision aims at boosting economic activity amid slowing inflation, which fell to a 29-month low in February. The Central Bank stressed that economic growth continues to be adversely affected by weaker external demand. The Bank also pointed out that ?global economic conditions are expected to stay subdued as fiscal and banking sector headwinds in advanced economies affect global output growth?. Regarding price developments, monetary authorities acknowledged that ?the inflation outlook remains within the target range, with well-anchored inflation expectations.? However, policy makers mentioned several upside risks to the inflation outlook, particularly those stemming from rising oil prices.