BSP has room to reduce interest

Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday the manageable inflation environment is giving monetary authorities the “elbow room” to further cut the benchmark interest rates if needed to counter the impact of the pandemic.

Diokno said in an interview over ANC that the Monetary Board, the policy-making body of the BSP, was closely monitoring the situation, especially the impact of the pandemic on the economy.

“We might want to cut again…. Right now we’re at 2.75 [percent] coming from 4 percent [percent]. We still have a lot of elbow room. I can tell you that,” Diokno said.

Inflation rate in April slowed to a five-month low of 2.2 percent from 2.5 percent in March, pulled down by the decrease in the indices of transport, alcoholic beverages and tobacco amid the implementation of enhanced community quarantine in several parts of the country to contain the spread of the disease.

The April print was slower than 3 percent in the same month last year. This brought the average in the first four months to 2.6 percent.