In a decision in line with market expectations, the Central Bank of the Philippines (BSP) has chosen to maintain its policy interest rate at 6.25%. This marks the fourth consecutive instance where the BSP has opted for stability in its policy interest rate, signaling a commitment to striking a balance between supporting the expansion of the Philippine economy and containing inflationary pressures.
The decision to keep the policy interest rate steady reflects the BSP’s ongoing efforts to assess and manage various risk factors that influence the trajectory of inflation. By maintaining the existing rate, the central bank aims to carefully monitor and respond to evolving economic conditions while ensuring price stability.
This decision comes on the heels of the recent announcement by the US Federal Reserve (Fed), which, during its meeting on September 20, opted to maintain its policy interest rate while signaling the possibility of raising it later in the year. The alignment of the BSP’s decision with the Fed’s stance underscores the interconnectivity of global financial markets and the importance of international developments in shaping monetary policy decisions.
In a Reuters survey involving 25 economists, 23 had anticipated that the BSP would keep the policy rate unchanged, while two had expected a 0.25% rate hike. The decision to maintain the existing rate highlights the central bank’s commitment to maintaining economic stability and supporting the Philippines’ economic growth trajectory.
As the BSP continues to navigate the challenges presented by the global economic landscape, the central bank remains vigilant in its efforts to ensure that monetary policy decisions are well-calibrated to address the evolving needs of the economy while guarding against inflationary pressures.