The Philippine central bank maintained its policy rates due to "a benign inflation environment" with inflation forecast to remain in line with the central bank's target through 2015.
The Central Bank of the Philippines (BSP) has held its policy rate steady at 3.50 percent since October 2012 and also maintained its other rates, including the overnight lending, or repurchase facility rate at 5.50 percent and the 2.0 percent rate on its special deposit account (SDA), which was cut in April to discourage the inflow of capital.
"The Monetary Board noted that while global economic conditions remain challenging, prospects for domestic activity remain robust, supported by buoyant domestic demand and favorable consumer and business sentiment," the BSP said.
The Philippine inflation rate rose to 2.7 percent in September from 2.1 percent in August but the bank said the risk to inflation remains unchanged with most lending going to productive sectors of the economy, helping sustain the capacity of the economy to absorb and thus moderate price pressures.
The bank said its latest forecast for inflation indicate that the path remains in line with the central bank's 2013/2014 target range of 4.0 percent, plus/minus one percentage point, and the 2015 target range of 3.0 percent, plus/minus one percentage point.
Gross Domestic Product in the Philippines rose by 1.4 percent in the second quarter from the first for annual growth of 7.5 percent, down from 7.7 percent.
The decision to maintain rates was widely expected and economist expect rates to remain steady the rest of the year.