Philippine central bank cuts key lending rate to 4.5% from 4.75% on tamed inflation
MANILA, NNA – The Philippine central bank on Thursday trimmed its key lending rate by 25 basis points to 4.5 percent from 4.75 percent on signs that inflation is under control.
Bangko Sentral ng Pilipinas raised the benchmark rate by a total of 175 basis points last year to 4.75 percent to tame inflation that had spiked to a 10-year high. Consumer prices have since calmed and the year-on-year rise in overall inflation eased to 3 percent in April, the lowest in 16 months.
The rate cut was expected by some market participants.
After a one-day policy meeting, the bank also said it maintained the reserve requirement ratio – the amount of cash lenders must hold as backup – at 18 percent, the highest in Asia.
Earlier on Thursday, the government reported that the Philippine economy grew at the slowest pace in four years in the January-March quarter, as the delay in budget approval dented some program and infrastructure spending and exports lost steam amid the global slowdown.