BSP ends interest rate, expects economic growth

Photo: George Calvelo, ABS-CBN News/File

Benjamin Diokno, Bangko Sentral ng Pilipinas governor, commanded an end to monetary policy easing for the year, looking forward for an economic growth.

The BSP will  “pause for a while” after cutting the benchmark interest rate by 75 basis points, reaching to 4 percent, and decreasing the reserve requirement ration for banks to 14 percent, Diokno stated.

“There will be no policy cuts this year and no more relaxation of the reserve requirement,” Diokno said.

Moreover, Diokno insisted that the economy is likely to grow from 5.8 to 6 percent in the third quarter, swayed by the country’s spending. Officials are expecting a 6.5 growth in the fourth quarter.

The fast paced approval of the tax reforms dedicated for corporate duties will aid in attracting more investments, he said.

“We are still forecasting close to 6 [percent], that’s the low end of the GDP target. That’s good enough. Still one of the fastest growing economy. The Philippines will still be one of the fastest growing economy in the world,” he added.

BSP’s Department of Economic Research explained inflation is likely to settle at 0.5 to 1.3 percent in October.

Average inflation can reach 2.5 percent for the full year as oil prices go down, but the African swine fever outbreak will have a minimal effect, Diokno said.