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Low BSP rates to stay— for now, say economists
The Bangko Sentral ng Pilipinas (BSP) maintained its key policy rate at a record low of 2 percent to support economic recovery.
This decision comes as economists anticipate the BSP will keep rates steady until late 2022, despite upside inflation risks.
The BSP revised its 2021 average inflation forecast downward to 4.3 percent from 4.4 percent, though it remains above the target range.
Projections for 2022 and 2023 inflation are 3.3 percent and 3.2 percent, respectively, remaining within the BSP's target band.
The Monetary Board noted that elevated inflation is primarily due to supply-side factors, which require non-monetary solutions.
While risks for 2022 inflation have shifted towards the upside due to global supply chain issues, oil prices, transport fare hikes, and food supply constraints, the BSP is prepared to address potential second-round effects.
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