MANILA — The Philippine central bank left its benchmark interest rate PHCBIR=ECI unchanged at 6.25% for a third straight meeting on Thursday to balance the need to support economic growth while keeping inflation in check.
“The monetary board recognised the challenging outlook for economic growth,” said Eli Remolona after chairing his first policy meeting as Bangko Sentral ng Pilipinas (BSP) governor.
The BSP’s decision to extend its policy pause followed data last week showing the domestic economy grew at its slowest annual pace in nearly 12 years in the second quarter, due to a contraction in government spending and weaker domestic demand.
All but one of the 20 economists in a Aug. 7-14 poll by Reuters expected the central bank to leave its overnight borrowing rate unchanged. One predicted a 25 basis point rate hike.
Its latest consumer price forecasts for this year and next showed inflation would average 5.6% and 3.3%, respectively, higher than its earlier projections of 5.4% and 2.9%.
Prices have cooled for a sixth straight month in July, but the 4.7% inflation rate remained outside the central bank’s 2% to 4% comfort range.
—Reporting by Neil Jerome Morales and Enrico dela Cruz; Writing by Karen Lema; Editing by Martin Petty
