Philippines keeps 6% rate on overnight deposit, 7% on lending facility

17 Nov '23

2 min read

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The Philippines central bank's monetary board has decided to keep its target reverse repurchase rate unchanged at 6.5 per cent.
Accordingly, the interest rates on the overnight deposit and lending facilities will be maintained at 6 per cent and 7 per cent respectively.
The projections indicate the inflation outlook has moderated over, the bank said.

The central bank’s monetary board in the Philippines recently decided to keep its target reverse repurchase (RRP) rate unchanged at 6.5 per cent. Accordingly, the interest rates on the overnight deposit and lending facilities will be maintained at 6 per cent and 7 per cent respectively.

The latest projections indicate that the inflation outlook has moderated over the policy horizon, the Bangko Sentral ng Pilipinas (BSP) said in a release.

The risk-adjusted inflation forecasts remain above the target for 2024 at 4.4 per cent (from 4.7 per cent projected in October) and within the target for 2025 at 3.4 per cent (from 3.5 per cent earlier).

The BSP survey of external forecasters shows that inflation expectations for 2024 rose above the target range in the October survey and have declined to the upper bound of the target in the November survey, while remaining anchored for 2025.

Supply-side inflation pressures continue to ease due in part to the government’s non-monetary interventions as well as seasonal factors.

Nevertheless, the balance of risks to the inflation outlook still leans significantly toward the upside, the central bank noted.

The board feels it is necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes fully evident and inflation expectations are firmly anchored.

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