BSP keeps reserve ratios, policy rates unchanged

The Bangko Sentral ng Pilipinas (BSP) kept its current interest rates and reserve requirements unchanged Thursday, noting “the current monetary policy settings remain appropriate given a manageable inflation environment and subdued economic outlook." New baseline projections show full-year inflation staying within the forecast 3-5 percent range, not just for 2011 but until 2013, BSP Governor Amando Tetangco Jr. said. The sputtering recovery of advanced economies helped lower the risks to the inflation outlook, Tetangco noted. As he had earlier hinted, the easing of inflationary pressures gave the Monetary Board enough confidence to keep policy rates unchanged. The BSP chief also said expanding liquidity and bank lending “could stoke inflationary pressures going forward." “The BSP therefore remains watchful over emerging conditions to ensure that the monetary policy stance is appropriate," Tetangco assured. Bank loans surged by 20.5 percent to P2.84 trillion last June, consisting of P206 billion in consumer loans and P2.36 trillion in production loans. Production loans per month have been above P2 trillion since last November. Headline inflation decelerated to 4.3 percent in August from 4.6 percent in July using the 2000-based consumer price index series. — ELR/VS, GMA News