Philippines Cuts Interest Rates Anew by 25 Points

Philippine monetary officials cut key policy interest rates by 25 basis points to support domestic consumption amidst a global economic crisis, the Philippine central bank said Thursday.

"The Monetary Board reduced policy rates further based on the latest baseline forecast showing that average inflation will be kept within the target ranges for 2009 and 2010," central bank deputy governor Diwa Gunigundo said.

In June, Philippine inflation fell to a 22-year low of 1.5 percent because of lower food and fuel prices.

The overnight borrowing rates or reverse repurchase facility (RRP) was reduced to 4 percent while overnight lending or repurchase facility (RP) was cut to 6 percent. The interest rates on terms RRPs, RPs and special deposit accounts were also reduced accordingly.

This is the sixth consecutive time that the Philippine central bank has reduced its key policy rates since December 2008. This is equivalent to a total 200 basis points reduction.