Statement by the Bangko Sentral NG Pilipinas:
The Monetary Board’s decision is based on its assessment of the dynamics and risks in the inflation environment over the policy horizon. While latest baseline forecasts show that inflation could fall below the inflation target range of 3 percent ± 1 percentage point for 2015 due to the successive low inflation outturns in recent months, inflation is projected to return gradually to a path consistent with the inflation target for 2016-2017. Meanwhile, inflation expectations also remain anchored within the inflation target band over the policy horizon. The Monetary Board noted that upside risks could come from the impact of stronger and protracted El Niño dry weather conditions on food prices and utility rates as well as pending petitions for power rate adjustments. In addition, the Monetary Board considered the weakness in the global economy and the continuing uncertainty in the global financial markets.
The Monetary Board likewise is of the view that domestic demand conditions remain firm, supported by buoyant business and consumer sentiment and ample domestic liquidity.
Given these considerations, the Monetary Board believes that the benign inflation outlook and the economy’s underlying growth momentum provide ample room to keep monetary policy settings unchanged at this time. The BSP will continue to monitor emerging price and output conditions to ensure that the monetary policy stance stays in line with maintaining price and financial stability.