Philippines Monetary Policy


Philippines: Central Bank keeps rate unchanged again in November

November 12, 2015

At its 12 November monetary policy meeting, the Central Bank decided to leave its Reverse Repurchase Rate at 4.00% as the markets had expected. This is the ninth consecutive meeting in which the Bank has maintained the rate unchanged. The Central Bank also decided to keep the reserve requirement ratio steady and to leave the interest rates on its Special Deposit Accounts (SDA) unchanged at 2.50%. SDA facilities are fixed-term deposit accounts with maturities of between one week and one month that the Central Bank offers to credit institutions and bank trust entities.

The Central Bank commented that domestic demand remains robust as evident in buoyant business and consumer confidence as well as adequate domestic liquidity. Regarding price developments, the Bank acknowledged that this year inflation will likely settle below the target range of 1.0 percentage point around its 3.0% target. However, the Bank projects inflation to pick up and approach the target in the next two years. Similar to the previous meeting, the Monetary Board considers that upward risks to inflation could emerge from the effect of the El Niño weather phenomena on food prices and utility rates. Conversely, downward risks could emerge from slower-than-expected global economic developments. The next monetary policy meeting is scheduled for 17 December.

FocusEconomics Consensus Forecast panelists see the Reverse Repurchase rate at 4.00% at the end of 2015. For 2016, panelists expect the Reverse Repurchase rate to rise to 4.45%.

Author: Teresa Kersting, Economist

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Philippines Monetary Policy Chart

Philippines Monetary Policy November 2015

Note: Reverse Repurchase Rate in %.
Source: Central Bank of the Philippines (BSP).

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