Bangko Sentral ng Pilipinas is not likely to adjust interest rates given the robust economy, Deputy Governor Diwa Guinigundo said Monday.
Guinigundo said Bangko Sentral was not entertaining the idea of changing the monetary policy, even after the US Federal Reserve raised its interest rates by 25 basis points.
“[The] Bangko Sentral need not adjust [its policy settings] even if other central banks increase interest rates… The economy is growing and there is no need to adjust policy rates,” Guinigundo said during the Kapihan sa Manila Hotel forum.
Guinigundo said Bangko Sentral was considering three factors in a decision to change the policy rates, including the state of the economy, monetary condition and inflation rate.
“We are also closely monitoring our monetary condition, especially the excess liquidity in the financial system, and inflation rate… We remain data-dependent…We see inflation settling within the 2 to 4 percent target range this year. [Because of this], we don’t have to act,” Guinigundo said.
The economy grew 5.6 percent in the first three quarters of 2015, lower than the target range of 7 percent to 8 percent, but still one of the fastest in Asia. Inflation rate also averaged 1.4 percent in 2015, below the target range.
Guinigundo said the approaching national elections in May might cause inflation rate to accelerate from the current level.
British bank Hongkong and Shanghai Bangking Corp. said earlier in a report Bangko Sentral might implement a policy rate cut in the second quarter this year as inflation remained manageable.
HSBC said Bangko Sentral had enough room “to maneuver” in its monetary policy stance, especially with the implementation of an interest rate corridor in the second quarter of 2016.
The last time the Monetary Board of Bangko Sentral changed the policy rates was on Sept. 11, 2014, when overnight borrowing was increased by 25 basis points to 4 percent and overnight lending was raised to 6 percent.