There is still no reason for interest rates to go up, according to both Finance Secretary Jose T. Pardo and Bangko Sentral ng Pilipinas (BSP) Gov. Rafael Buenaventura.
According to Pardo, the March cash budget position is expected to be every good following the overperformance of the Bureau of Customs and the likewise positive performance of the Bureau of Internal Revenue.
The March cash budget position is still not available though.
Government, Pardo assured, has a healthy cash position as recently reported to him by National Treasurer Leonor Briones.
On the part of the BSP, the Monetary Board last Friday maintained its key overnight borrowing rates as it saw no reason for an adjustment in spite of the weakening of the peso.
There was earlier some speculation that government would use interest rates to attract speculators away from the foreign exchange market.
Buenaventura reiterated that the current weakness of the peso is temporary. As such, government does not see the need to raise interest rates as a tool toward off speculators.
The BSP governor also cited the fact that inflation remains low and would likely remain so in the next couple of months.
In fact, government is wary of raising interest rates at this time when the economy is still uncertain and loan demand continues to remain low.
Higher interest rates would only convince businessmen to further refrain from any new borrowings.
The 91-day Treasury bill rates have remained relatively stable with only slight sideways movements.
The 182-and 364-day tenors, on the other hand, have been driven up by buyers who for the medium-term foresee an increase in interest rates. -