Abad backs BSP decision to keep rates steady By: Prince
Magtulis
Abad backs BSP decision to keep rates steady By: Prince Magtulis
Presented by : Sim,Nowell Paolo Q.
10/15/2015The government has supported the central banks
decision to keep interest rates steady despite low-trending
inflation that has prompted calls for a looser monetary policy to
support economic growth2Secretary Florencio Abad chairs the
inter-agency Development Budget Coordinating Committee (DBCC)sets
the governments macroeconomic targets
Its members are the Department of Finance, the Bangko Sentral ng
Pilipinas (BSP), the Office of the President and the National
Economic and Development Authority
3The central bank has stood pat on tweaking any of its policy
tools this year despite slowing inflation and opinion from local
and international analysts
The Philippine economy expanded 5.3 percent in the first
semester, slowing from 6.4 percent in the same period a year
ago4The business process outsourcing industry (BPO) is also a
source of strength
the continued influx of cash remittances from overseas
Filipinos, which grew 5.6 percent to $12.084 billion as of the
first semester
For the first nine months, consumer prices have also risen by an
average of 1.6 percent, below the official two- to four-percent
target for the year
1st- as said by sec abad and sec purisima 2nd- The budget chief
cited that ..On average, overseas remittances amount to $22 billion
for the past four year
5Inflation could settle under its goal due to prevailing low oil
prices in the global and domestic markets
The current oil market situation of production outpacing global
demand could persist over the near-term
Slower global economic activity could (also) pose a downside
risk to inflation DBCC, said in its mid-year report last Sept. 30
that
6Philippine interest rates have been kept stable at four and six
percent for overnight borrowing and lending
The BSPs inaction stands in contrast with some of its Asian
peers that decreased their rates in the face of slowing regional
growthFirst- Despite slowing inflation , they have been at that
level since October last year.
7The economy is also benefiting from the state infrastructure
projects, which rose 93 percent in July and more than a fifth in
August
This trend is expected to continue throughout the remainder of
the year
For both: Aside from huge liquidity, Abad said8
