Manageable inflation prompts BSP to keep yield rates steady

The Bangko Sentral ng Pilipinas (BSP) on Thursday kept policy rates unchanged anew, citing a regime of manageable inflation.

In a policy meeting, the BSP's Monetary Board left the key rates for overnight borrowing at 3 percent and overnight lending at 3.5 percent. It also kept the yield rate on special deposit accounts (SDA) at 2.5 percent, and the reserve requirement ratio at 20 percent.

"The Monetary Board's decision is based on its assessment that inflation continues to be manageable, with a gradual return to the inflation target range expected over the policy horizon," BSP Governor Amando M. Tetangco Jr., told reporters in a briefing.

At the same briefing, BSP Deputy Governor Diwa C. Guinigundo said the policy-setting Monetary Board has revised its inflation outlook to 1.8 percent for the whole of 2016 compared with its forecast of 1.7 percent in September.

The board revised its inflation outlook to 3.0 percent from 2.9 percent for 2017 and to 2.9 percent from 2.6 percent for 2018.

"At least three reasons are behind this upgrade in the inflation forecast: higher September and October actual inflation rate, the rebound in petroleum prices and, finally, the weaker peso," he said. — VDS, GMA News