By Joann Villanueva/PNA
MANILA — Philippine monetary officials on Thursday kept key rates steady amid a deceleration in inflation, which is expected to ease back within government’s target levels by the second half of 2019.
Thus, the overnight lending rate remains at 5.25 percent, up by 175 basis points as a result of the elevated inflation rate this year.
Reading the statement of BSP Governor Nestor A. Espenilla Jr., BSP Assistant Governor Francisco Dakila Jr., in a briefing, said members of the Monetary Board (MB) have noted that the rate of price increases have indicated a downward trajectory until 2020.
“Recent headline inflation readings indicate signs of receding price pressures as constraints on food supply continue to ease with the implementation of various non-monetary measures,” he said.
He was referring to the directives of Malacanang, implemented since last September, to address supply constraints on rice and other agricultural products, that are intended to moderate the high inflation rate.
These measures include the release of rice stocks in all warehouses of the National Food Authority (NFA) and ensure its safe delivery to all markets around the country.
With these measures, inflation registered lower figure last November at 6 percent after peaking at 6.7 percent last September and October.
Dakila also said that inflation expectations have “steadied” due to drop in international crude oil prices and stabilization of the peso.
He said risks to inflation outlook “have become more evenly balanced” for next year amid the uncertainties in global economic environment.
With these factors, Dakila said the Board considered to hold rates steady to “allow previous monetary responses to continue to work their way through the economy.”
“The Monetary Board emphasizes that it remains vigilant against developments that could affect the outlook for inflation and financial stability,” he said, adding that the central bank “is prepared to take further policy action as appropriate to safeguard its price stability mandate.”
