The Philippine central bank halted its most aggressive monetary tightening in two decades, amid easing inflation and moderating economic growth.
The Bangko Sentral ng Pilipinas kept its overnight reverse repurchase rate at 6.25% on Thursday, as seen by 17 of 24 economists in a Bloomberg survey. The rest predicted a 25-basis-point hike.
The BSP joins peers in Singapore, Indonesia and India in keeping policy settings unchanged, after domestic inflation cooled for a third month in April and economic growth softened in the first quarter. The central bank’s pause comes after 425 basis points of rate increases in the past year, which lifted the benchmark rate to a 16-year high.
The rate-hike breather also follows a caution from National Economic and Development Authority Secretary Arsenio Balisacan last week that more interest-rate increases may dampen future economic growth. The Philippine economy is expected to expand between 6% and 7% this year.
--With assistance from Ditas Lopez, Tomoko Sato and Cecilia Yap.
Author: Andreo Calonzo and Manolo Serapio Jr.
