BSP holds rates; sees no major inflation pressures
MANILA, Philippines - The Philippine central bank said on Thursday it expects inflation to remain subdued this year and into 2014 despite weakness in the local currency and pressures from volatile oil prices.
Diwa Guinigundo, central bank deputy governor, told reporters the monetary authority expects inflation to average 3.0 percent this year, lower than a previous estimate of 3.3 percent and at the low end of the central bank's target of 3-5 percent.
"Balance of risks to the inflation outlook has shifted slightly toward the upside as oil prices have become more volatile amid ongoing geopolitical tensions in the Middle East," central bank Governor Amando Tetangco said.
But he added that the inflation outlook remains broadly in line with the central bank target and inflation expectations were "firmly anchored".
The central bank held its benchmark rate and the rate on its special deposit account (SDA) facility steady on Thursday, as fully expected because inflation is slowing and economic growth remains strong.
The overnight borrowing rate has been kept at a record low 3.5 percent since December, while the SDA rate has been unchanged since June at 2.0 percent.
Philippine central bank governor Amando Tetangco said in Kuala Lumpur on Wednesday he saw "no urgency" to change rates.
The policy board holds a rate-setting meeting every six weeks.