The Philippines: BSP still has policy space — Diokno

  • The manageable inflation environment continues to afford the central bank with policy space that can be used to respond to the pandemic, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on 8 Jul 20.
  • “The relatively benign inflation outlook in the policy horizon provides space for monetary policy adjustments to complement the National Government’s efforts in mitigating the adverse impact of the public health crisis,” he said at the Pre-SONA (State of the Nation Address) Forum of the Economic Development and Infrastructure Clusters.
  • Mr. Diokno’s remarks came a day after government data showed quicker-than-expected 2.5% headline inflation in Jun 20. The Jun 20 print was slower than the 2.7% in Jun 19 but faster than the 2.1% in May 20, largely driven by the uptick in fuel, food, and transport prices.
  • In Jun 20, the central bank slashed key policy rates by 50 basis points (bps) on its fourth easing in 2020, trimming the overnight reverse repurchase, lending, and deposit rates to 2.25%, 2.75%, and 1.75%, respectively.

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