BSP holds benchmark rate unchanged anew

MANILA, Philippines — The Bangko Sentral Ng Pilipinas’ (BSP) Monetary Board has decided to retain its policy rates for the second time in December 2023.

During a press briefing on Thursday, the board decided to keep the 6.5% benchmark interest rate, unchanged since October 2023, despite the country's November inflation cooling off to 4.1%.

BSP Governor Eli Remolona attributed the monetary board’s decision to factors like increased transport charges, electricity rates and oil prices.

“The balance of risks to the inflation outlook still leans significantly toward the upside. Key upside risks are associated with potential pressures emanating from higher transport charges, increased electricity rates, and higher oil prices,” BSP’s statement read.

“Meanwhile, the impact of a relatively weak global recovery as well as government measures to mitigate the effects of El Niño weather conditions could reduce the central forecast,” the BSP added.

The interest rates for overnight deposit and lending facilities, set at 6.0% to 7.0%, remained unchanged.

On December 6, Remolona said that the central bank will keep its “hawkish” stance until inflation stabilizes within the government's 2% to 4% target range. . 

On October 26, the Monetary Board implemented an off-cycle rate hike, raising the target reverse repurchase rate by 25 basis points to 6.5% from 6.25%.