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The
Philippine central bank has room to reduce borrowing
costs after U.S. and European policy makers cut rates
and the Southeast Asian nation's inflation slowed from a
16-year high, Governor Amando Tetangco said.
“The
move, taken together with improved inflation
expectations, gives us greater monetary policy space,”
Tetangco said in a mobile-phone message today from
Washington.
The
coordinated rate cuts will also have a “positive effect”
on markets including Asia, he said.
The
Federal Reserve, European Central Bank, Bank of England,
Bank of Canada and Sweden's Riksbank each cut their
benchmark rates by half a percentage point to arrest a
deepening credit crisis that sent stocks and currencies
reeling. Slowing growth in the Philippines also gives
Tetangco a reason to lower borrowing costs after a
series of increases since June.
Bangko
Sentral ng Pilipinas, which kept its overnight borrowing
rate at 6 percent on Oct. 6, said it's “ready to
reexamine policy settings when warranted.”
Inflation slowed to 11.9 percent in September from a
year earlier and the central bank expects the pace to
ease to single-digit levels by the first quarter of next
year as oil and food prices drop.
Philippine economic growth may slow to as little as 3.8
percent this year from 7.2 percent in 2007, according to
Finance Secretary Gary Teves.
“The
Philippines has enough liquidity to support economic
growth and avoid a credit crunch,” Deputy Governor Diwa
Guinigundo today said in a separate mobile phone
message.
Guinigundo on Oct. 6 said “it might be too early” to
consider cutting rates. |
