Philippines: Central Bank maintains policy rate in December
December 13, 2012
At its 13 December monetary policy meeting, the Central Bank left its Reverse Repurchase rate unchanged at a record-low of 3.50%, in a decision expected by the market. Over the course of 2012, the Central Bank has cut the rates four times, resulting in a cumulative reduction of 100 basis points to the Reverse Repurchase rate.
According to the Central Bank, "the Monetary Board's decision is based on its assessment that current monetary settings remain appropriate, as the cumulative 100-basis-point reduction in policy rates in 2012 continues to work its way through the economy". Policymakers noted that global economic activity has stabilized somewhat but is likely to remain subdued going forward. On the domestic front, the Bank stated that GDP growth has gained pace in the third quarter, driven by robust domestic demand.
Regarding price developments, monetary authorities reaffirmed that the "inflation outlook appears to be evenly balanced around the baseline forecasts".