The domestic economy does not need an extra boost at this point, said Deputy Governor Diwa Guinigundo, adding policymakers were not considering lowering banks’ reserve requirement ratio currently at 21 percent.
“At this point, we think that monetary policy remains appropriate,” Guinigundo said.
“It is supportive of economic growth, and at the same time it ensures price stability.”
“The Philippine economy does not need further boost at this point because it is resilient,” Guinigundo said.
The central bank meets to review policy on Dec. 1, three days after the release of official third quarter growth data on Monday.
Analysts widely expect the central bank to leave interest rates unchanged at 4.5 percent for a fifth meeting in a row next week, but a worsening global economic outlook will likely support the case for policy easing next year.
“We are not saying that even in the future no public intervention is necessary,” Guinigundo said, adding monitoring of developments in the euro zone and United States was important.
“What I am saying at this point, the third and fourth quarters will turn in very good economic performance but anything can happen (between) now and near future,” he said.
The government expects annual growth in the third quarter to have expanded 3.8 to 4.8 percent, and Guinigundo said growth in the final three months of the year may surpass the September quarter as remittance-fueled domestic consumption offsets sluggish exports and farm output dampened by typhoons.
“You have enough liquidity in the system, credit is available, interest rates are very affordable. I think the economy is right in the groove,” Guinigundo said.
An expected increase in consumer demand during the Christmas holidays and sound macroeconomic fundamentals were the main reasons for Philippine businesses’ more upbeat outlook for the fourth quarter, according to the central bank’s latest business expectations survey.
But business sentiment is less optimistic for the first quarter next year partly due to the weak global economy.
Some central banks in emerging economies have moved to an easier policy stance in recent months as global risks mount and inflationary pressures ease, led by Indonesia which slashed rates by a total of 75 basis points in two meetings in a row.
Thailand is expected to cut rates this month after its economy grew much less than expected in the third quarter. Brazil has also cut rates to sustain growth as the global expansion falters.
