BSP keeps key rates low

THE Bangko Sentral ng Pilipinas yesterday decided to keep its key policy rates steady, citing the need to further boost the economy’s modest growth.

“The Monetary Board’s decision is based on its view that the current monetary policy settings remain appropriate. Keeping policy rates unchanged could also encourage further investment and borrowing activities,” said BSP governor Amando Tetango Jr. shortly after the last policy rate meeting for the year.

From December 2008 to July 2009, the BSP slashed overnight borrowing and lending rates to historic lows of 4 percent and 6 percent, respectively. Yesterday, the central bank kept the same rates.

The series of rate cuts was meant to influence banks to reduce their own lending rates and encourage borrowings. Monetary authorities said borrowings should support consumption and investments, which in turn would fuel growth.

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