Statement by the Bankgo Sentral NG Pilipinas:
The Monetary Board’s decision is based on its assessment of manageable inflation. While inflation has risen slightly due mainly to the recent increase in food prices on account of adverse weather conditions, latest baseline forecasts continue to indicate that the future inflation path is likely to stay within the target ranges of 4±1 percent for 2014 and 3±1 percent for 2015. Meanwhile, market expectations remain anchored to the inflation target over the policy horizon.
The Monetary Board noted that the balance of risks to the inflation outlook remains slightly weighted toward the upside given the pending petitions for adjustments in utility rates and the possible uptick in food prices. The Board also noted that while the global economy has become more challenging because of heightened financial market uncertainty following monetary policy adjustments in the US and generalized concerns about the sustainability of growth in emerging economies, domestic economic activity is likely to stay firm. Sound fundamentals such as buoyant demand, strong fiscal and external positions as well as favorable consumer and business sentiment would support the economy.
The Monetary Board will continue to closely monitor and assess evolving growth and liquidity conditions and will consider policy adjustments, when needed, to ensure continued price and financial stability.