A question of timing: The Philippines' low interest rate policy

Monetary policy in the Philippines enters a new arena. It is no longer a matter of lowering interest rates, but whether the Monetary Board should lower rates before the US Federal Reserve does.

 

For his part, Bangko Sentral central bank governor Rafael Buenaventura has declared before the Foreign Correspondents Association of the Philippines that, there is no question we are headed towards low interest rates.

Today March 8, the Monetary Board chaired by the BSP governor, with Finance Secretary Alberto Romulo as vice-chairman, will conduct another policy meeting, but is not expected to lower rates until after the March 20 US Federal Reserve committee meeting.

Some government officials, especially the newly appointed National Treasurer Sergio Edeza favors a rate cut one step ahead of the US.

Buenaventura does not readily agree to a pre-emptive rate cut, preferring instead to await the Fed meeting...

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