Bangko Sentral ends interest rate, the reserve requirement is reduced by 2019

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Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Monday signaled an end to monetary easing for the year, targeting inflation and economic growth.

The central bank would pause for a while after lowering the benchmark interest rate by 75 basis points, taking it to 4 percent, and increasing the reserve requirement ratio for banks to 14 percent, Diokno told ANC.

Diokno said that the economy was likely to grow by 5.8 to 6 percent in the third quarter, guided by government spending. Growth in the fourth quarter could accelerate to 6.5 percent, taking the full-year average to “close to 6 percent” compared to the government target of 6 percent to 7 percent.

The rapid passage of the second round of corporate tax reform would help attract further investment, he said.

Inflation probably settled at 0.5 to 1.3 percent in October, BSP’s Economic Research Department said earlier. Diokno said that it could settle under 1%.

Average inflation could rise to 2.5 percent for the full year as oil prices plunge, with the outbreak of African swine fever likely to have only a “minimal” impact, he said.

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