Bangko Sentral may ease monetary policy next year

With inflation sliding to 4.7 percent in November after peaking at 5.3 percent In October, the Bangko Sentral ng Pilipinas (BSP) is “open to possible easing next year” Gov. Amando Tetangco Jr. said Tuesday.   Tetangco said further loosening of policy settings could become more likely "especially if our own growth prospects continue to be subdued."   Gross domestic product from January to September this year settled at 3.6 percent following a third quarter slowdown to 3.2 percent.   Consumer spending fueled 69 percent of the economy's P1.4 trillion output in July-September while government spending accounted for only 9.8 percent.   Further policy easing would make production and consumer loans cheaper and more accessible. Total loans of the banking system in the first six months grew by 19.25 percent to P3.22 trillion from P2.7 trillion in the same period last year.   "Over the policy horizon (up to 2013), we see the balance of risks tilted to the downside," the BSP governor explained.   However, Tetangco said the balance could tilt the other way if commodity prices turn volatile and if geopolitical developments in the Middle East impede financial market flows.   He said these external factors may "adversely impact our domestic inflation dynamics." — ELR/VS, GMA News