BSP keeps interest rates unchanged at record low

The Bangko Sentral ng Pilipinas (BSP) kept its key interest rates unchanged on Thursday, maintaining the overnight borrowing rate at 2%, and deposit and lending facilities at 1.5% and 2.5%, respectively.

Governor Benjamin Diokno cited improving economic activity but noted that recovery remains tentative due to ongoing COVID-19 threats.

Economists predict steady rates for the rest of the year, with a possible rate hike by mid-next year if inflation stabilizes.

Inflation is expected to decelerate in coming months, partly due to reduced import tariffs on pork and rice.

Several analysts also anticipate a potential cut in banks' reserve requirement ratio (RRR) from 12% if inflation remains stable.