MANILA, Oct. 9 (Xinhua) -- The Philippine central bank on Thursday decided to reduce its target reverse repurchase rate by 25 basis points to 4.75 percent and the interest rates on the overnight deposit and lending facilities to 4.25 percent and 5.25 percent, respectively.
"This decision reflects our latest reading of economic conditions as well as judicious adjustments to our model. These adjustments reflect the new importance of business sentiments in light of the issues related to government infrastructure spending," said the Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolina in a press conference.
"We now find the inflation outlook is quite benign and well within the target range," said Remolina, adding that "inflation expectations remain well-anchored."
However, he said that "potential electricity rate adjustments and possible tariff increases on rice imports pose some risks, but these risks look limited."
He said that the risks to the inflation outlook are limited as price pressures are expected to ease.
He said the BSP's Monetary Board also noted that the outlook for domestic economic growth has weakened in the near term.
According to the BSP, the outlook reflects in part the impact on business confidence of governance concerns about public infrastructure spending. Indications of moderating demand also reflect lingering uncertainty from the external environment. ■
