Philippines leaves rate steady, lets earlier cuts take effect

   The central bank of the Philippines left its key policy rate unchanged at 3.75 percent, as expected by most economists, letting earlier rate cuts work their way through the economy amidst a balanced outlook for inflation.
    Bangko Sentral ng Pilipinas (BSP) said a weak global economy tempers the outlook for inflation but it remains mindful of upside risks from electricity rate adjustments, higher grain prices and firm demand-side pressures from ample domestic liquidity.
    "On balance, therefore, the Monetary Board is of the view that prevailing monetary policy settings remain appropriate," BSP said in a statement following a meeting of its Monetary Board.
     "This is supported by the manageable inflation outlook and robust domestic growth, especially as the cumulative 75-basis-point reduction in policy rates and other operational adjustments earlier in the year continue to work their way through the economy," it added.
    BSP cut its benchmark reverse repurchase rate in January, March and July. 
    Inflation in the Philippines rose to an annual rate of 3.8 percent in August from 3.2 percent in July.     The bank forecasts inflation of 3.1 percent this year. The bank targets annual inflation of 3-5 percent.
    The Philippine economy expanded by 5.9 percent in the second quarter, down from 6.4 percent in the first. 
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