* Benchmark rate left at 3.0 pct, as expected
* 2017 inflation rate seen at 3.3 pct
* C.bank says 7 pct growth in 2016, 2017 'very doable'
MANILA, Dec 22 The Philippine central bank saw
no reason to alter monetary policy settings at its meeting on
Thursday, its first since the Federal Reserve hiked rates,
confident that growth will remain solid and inflation will stay
within its comfort range.
The policy-making Monetary Board kept the overnight
borrowing rate steady at 3.0 percent, as well as
the ceiling and floor rates of its interest rate corridor at 6.0
percent and 2.5 percent, respectively.
"Domestic demand conditions are likely to stay firm,
supported by solid private household spending, higher government
expenditure," Bangko Sentral ng Pilipinas Governor Amando
Tetangco told a media briefing.
After likely falling below target this year, inflation is
forecast to move inside the central bank's 2-4 percent target
range in 2017 and the following year, due to possible power
tariff hikes and a weaker peso.
The central bank raised its inflation forecast for 2017 to
3.3 percent from 3.0 percent, and for 2018 to 3.0 percent from
It also set a 2-4 percent inflation target for 2019 and
All 13 economists polled by Reuters had expected no change
in the central bank's policy rate, but some of them said
pressure from U.S. rates and robust growth in domestic demand
could build the case for a hike next year.
IN A SWEET SPOT
The BSP has not tinkered with monetary policy since it
raised rates by 25 basis points in September 2014, with the
economy in a sweet spot of strong growth and low inflation.
But it set the main rate at 3.0 percent when it moved to an
interest rate corridor framework in June to make policy
transmission faster and more efficient.
At a review on Tuesday, officials kept the economic growth
targets at 6.5-7.5 percent for the coming year and 7-8 percent
for 2018, even as they forecast the peso to weaken against the
dollar over the next two years.
Economic growth this year might top 7.0 percent after 7.1
percent annual expansion in the third quarter.
Central bank deputy governor Diwa Guinigundo told the same
briefing that 7 percent growth this year and next year is "very
(Reporting by Enrico dela Cruz and Neil Jerome Morales; Writing
by Karen Lema; Editing by Richard Borsuk)