Higher interest rates not necessary despite slowed GDP, says BSP official

The slower-than-expected gross domestic product (GDP) in the third quarter does not mean monetary authorities will cut interest rates, a central bank official said Monday.   The National Statistical Coordination Board reported Philippine output grew slower at 3.2 percent in the third quarter year-on-year from 3.1 percent in the second quarter.   "The growth performance was indeed disappointing,” Bangko Sentral Deputy Gov. Diwa Guinigundo said in a text message to reporters.   “Monetary conditions I believe have been quite conducive to higher economic growth. However, I don't think at this point monetary easing is imperative because domestic credit remains strong and interest rates continue to be low," Guinigundo noted.   Monetary authorities also consider other factors such as inflation and domestic liquidity during the policy rate setting meeting of the BSP's Monetary Board. The last policy-rate setting meeting of the board is scheduled this Thursday.   "Inflation is well managed and market confidence has been sustained. Liquidity issue is virtually nil," said Guinigundo.   He explained that there is a need to boost domestic demand and up efforts to attract more investments.   "We need more people who would invest and create jobs and income. We need to show that the Philippines is truly a good investment destination by higher levels of public and private spending on infrastructure and people. Of course, the unfavorable external conditions are a dampener and the challenge is precisely to strengthen our domestic demand," the central bank official said. — VS, GMA News