BSP says won't hesitate to adjust policy

Posted at 07/09/2014 4:11 PM

MANILA - The Philippines' central bank will not hesitate to tweak monetary policy to ensure inflation remains within target, even as it continues to assess the impact of current price pressures, its governor said on Wednesday.

Amando Tetangco told reporters on the sidelines of a central bank event that various tools were available and "always on the table", adding that the authorities were "not committed to a preset policy action".

"If and when there is a need to use them, we will not hesitate to adjust policy settings, the stance of monetary policy," Tetangco said, reiterating previous comments on policy at the Bangko Sentral ng Pilipinas.

The policy-setting Monetary Board left its key interest rate unchanged at a record low 3.5 percent at its June 19 meeting.

But it raised the rate for its short-term special deposit accounts facility by 25 basis points after two consecutive increases in banks' required reserves to stem the inflationary effects of excess money supply.

It next meets to review policy on July 31.

Annual headline inflation eased slightly in June but the first-half average remains above the mid-point of the central bank's 3 to 5 percent target band for the year. Still, Tetangco said latest forecasts showed inflation this year would remain within target.

He said the monetary authorities were watching global developments, including shifts in market appetite and geopolitical risks, and assessing how these would affect the inflation outlook, financial stability and domestic liquidity.