Philippines maintains key policy rates

MANILA, Philippines (Xinhua) - Philippine monetary officials decided today to keep policy interest rates unchanged as inflation expectations are expected to be firmly anchored.

The overnight borrowing rates or reverse repurchase facility (RRP) is unchanged at 3.50 percent while overnight lending or repurchase facility (RP) is at 5.50 percent. The interest rates on terms RRPs, RPs and special deposit accounts were also left unchanged. It also decided to set the interest rate on RRPs at 3. 50 percent for all tenors.

Following its previous decision to rationalize the Special Deposit Account (SDA) facility in January, the Monetary Board further reduced the interest rates on the SDA facility by 50 basis points to 2.50 percent across all tenors.

The reserve requirement ratios were kept steady.

Central Bank Governor Amando M. Tetangco Jr. said the risks to the inflation outlook are "evenly balanced."

An expected increase in electricity rates and potentially stronger domestic liquidity growth due to expectations of further capital inflows pose upside risks to the inflation outlook. But Tetangco said lingering fiscal and financial market stresses in the advanced economies continue to dampen the broad outlook. This mitigates upward pressures on commodity prices.