Interest rates to stay low in 2013 — Bangko Sentral

Movements in consumer prices are likely to stay benign this year and benchmark interest rates are expected to remain at all-time lows and conducive for businesses, the Bangko Sentral ng Pilipinas chief said Thursday. 

 

Projections that consumer prices will increase at a modest pace this year will allow the central bank to keep interest rates low,  Bangko Sentral Governor Amando Tetangco Jr. said in a speech before the Rotary Club of Manila in Makati City.

 

The government targets the average increase in consumer prices to settle between 3 and 5 percent this for 2013, with the central bank expecting inflation to average near the lower of the target. 

 

“Businesses could expect the BSP to keep interest rates at low levels in 2013,” Tetangco said.

 

Low interest rates make money affordable for enterprises, spurring investments and growth. 

 

In 2012, the BSP cut its key policy rates by a total of 100 basis points, which brought the bench mark overnight borrowing rate at record lows of 3.5 percent and and the lending rate at 5.5 percent. 

 

The rate cuts were meant to boost domestic spending and buoy the Philippine economy as major markets were weak. 

 

Central bank last year said the modest inflation was helped by a favorable supply situation as production capacities of most companies grew. — SOA/VS, GMA News