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BSP chief expects steady policy rest of 2015

Posted on October 03, 2015

MANILA -- The Philippine central bank chief said on Friday that monetary policy can remain steady for the rest of the year, reiterating a policy stance that reflects a more encouraging outlook for the Southeast Asian economy amid a slowdown in much of the region.

“Given the information that we have, there is no need to change the stance of policy and that can continue until the end of the year,” Amando Tetangco told reporters after delivering a speech at a banking industry event.

The government has given up its 7-8% growth target this year, but the latest 6-6.5% forecast still leaves the Philippines as one of the few bright spots in Asia.

Higher state spending and strong private consumption are helping Southeast Asia’s fifth-biggest economy offset faltering exports.

“We hope that the September print will be much more robust to ensure that (national government) spending still pulls up 3Q2015 GDP to above 6% and help the Philippines distinguish itself further from the rest of EM (emerging market) peers,” said Bank of the Philippine Islands’ lead economist Emilio Neri Jr.

The national government spent P161.6 billion in August against a target of P182 billion.

Mr. Tetangco’s latest policy remarks came a day after the government announced it had a budget surplus in August after missing its spending target for the month.

On Monday, Mr. Tetangco told a local news channel that inflation is likely to be within the 2-4 percent target for 2016 and 2017, meaning there is no urgency for the central bank to adjust policy.

Last week the central bank’s policymaking Monetary Board voted to keep the overnight borrowing rate steady at 4.0 percent, where it’s been since September 2014.

The Monetary Board has two more policy-setting meetings scheduled before the year ends. -- Reuters