Philippines Holds Benchmark Rate at 4% as Growth Set to Quicken

The Philippines left its benchmark interest rate unchanged for a 13th straight meeting, with economic growth seen quickening on election spending and higher state outlays.

Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 4 percent, it said in Manila on Thursday, as predicted by 14 of 15 economists surveyed by Bloomberg. Policy makers also held the rate on so-called special deposit accounts at 2.5 percent, as forecast by all seven analysts.

Investors are counting on central bank Governor Amando Tetangco to provide stability as the nation braces for an incoming president Rodrigo Duterte, a tough-talking mayor who won the May 9 elections and who is yet to provide clarity on his economic plans. Economic growth is forecast by the government to exceed 6 percent this year.

“It’s very clear inflation is very steady and growth is going to strengthen especially after the election uncertainty is over,” Trinh Nguyen, a senior economist at Natixis Asia Ltd. in Hong Kong, said before the decision. “The central bank has been very clear with what it has said, that there is no need to change policy at this point.”

The central bank kept its inflation forecasts unchanged, predicting an average of 2.1 percent for this year and 3.1 percent for 2017.

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