BSP maintains overnight rates

As expected, the Bangko Sentral ng Pilipinas (BSP) decided yesterday to maintain its key overnight borrowing and lending rates at 8.750 percent and 11 percent, respectively, as a continuing symbol of stability.

Monetary Board member Antonino Alindogan said the board felt there was no reason to adjust the key overnight rates with the continued slowdown in inflation rate.

Alindogan, however, assured the Monetary Board will still closely monitor the market for any changes especially the foreign exchange rate and Treasury bill yields.

Meanwhile, Finance Secretary Jose T. Pardo said the government will concentrate on "rebuilding confidence" in the economy following the turmoil in the stock market which was triggered by the BW Resources fiasco.

Pardo agreed that there is no reason for interest rates to move up despite the US Federal Reserve Board's decision to jack up its interest rates.

"What is more important is to rebuild confidence in the economy which has been adversely affected by the negative news regarding BW Resources and the local stock market," Pardo said.

Pardo has been meeting with the country's top economic leaders to arrive at a consensus on what aspects to immediately address.

He gave assurance that the government continues to perform well especially in its fiscal position.

"Based on the preliminary reports of the Bureau of Internal Revenue and the Bureau of Customs, the March figures appear good," Pardo said.

However, other sources warned that any further increase in the US interest rate may finally take its toll on the economy.