Philippine Central Bank on a ‘Cautious Easing Bias’
Written on July 21, 2009
The Philippine central bank, which has cut its benchmark interest rate six times in the past seven months, said it’s on a “cautious easing bias” as it awaits clearer signs of an economic recovery.
“The inflation outlook continues to be benign while inflation expectations remain well-anchored,” Deputy Governor Diwa Guinigundo said in a mobile-phone text message today. “When economic recovery becomes more evident, we need to review our stance.”
Easing inflation allowed Bangko Sentral ng Pilipinas to cut borrowing costs to a record low of 4 percent this month to boost the $144 billion economy. Gross domestic product growth slumped to a decade low of 0.4 percent in the first quarter as exports collapsed amid the global recession.
The government predicts growth will accelerate in the succeeding quarters as the world economy recovers from the worst slowdown since the Great Depression compare car insurance prices. Stronger expansion in the U.S. and China will help boost demand for Philippine exports and workers, Governor Amando Tetangco said in an e-mail to reporters sent yesterday.
China’s economy grew 7.9 percent in the second quarter from a year earlier, beating economists’ estimates and accelerating from 6.1 percent in the previous three months.
“Commodity prices are bound to start rising again,” Guinigundo said. “The central bank should, therefore, be very watchful to ensure it is well positioned to respond.”
Philippine policy makers next meet on Aug. 20 to decide on borrowing costs.
Filed in: business.