* BSP keeps key rate at record-low 2.25% for second meeting
* Inflation moderating, but ‘uncertainty remains elevated’
* BSP approves govt request for ‘provisional advances’ (Adds cbank chief quote, more details, background)
MANILA, Oct 1 (Reuters) - The Philippine central bank kept its policy rates steady on Thursday, extending its monetary easing pause for a second successive meeting while approving $11 billion in funds to help government efforts to mitigate the impacts of the coronavirus.
The Bangko Sentral ng Pilipinas (BSP) maintained the rate on the overnight reverse repurchase facility at a record-low 2.25%. Rates on the overnight deposit and lending facilities were likewise kept steady at 1.75% and 2.75%, respectively.
The BSP at the same time approved the government’s request for a new 540 billion pesos ($11.1 billion) of “provisional advances” intended as budgetary support, Governor Benjamin Diokno said.
Twelve of 13 economists Reuters surveyed ahead of Thursday’s policy meeting had expected the BSP to keep rates on hold, while one had projected a cut of 25 basis points.
“The Monetary Board is of the view that a continued pause will allow prior measures by the BSP to further work their way through the economy,” Diokno said in a statement that he read at a briefing.
The BSP has slashed rates by a cumulative 175 basis points between February and June in an effort to revive the recession-hit economy. The central bank revised down its average inflation forecasts to 2.3% for this year, from 2.6% previously, and to 2.8% for next year, from 3%. Those were still within the 2%-4% target range for both years.
It sees inflation for 2022 at 3% versus 3.1% previously.
Diokno said inflation is expected to remain moderate given potential disruptions to economic activity due to the pandemic, but he said liquidity in the financial system remained ample.
While signs of a recovery in economic activity have emerged, he said “uncertainty remains elevated” while new infections continue in large numbers.
The Philippines has the highest number of COVID-19 cases in Southeast Asia with 314,079 confirmed infections as of Thursday. A total of 5,562 patients have died.
Reporting by Neil Jerome Morales; additional reporting by Karen Lema and Enrico Dela Cruz Editing by Ed Davies, Martin Petty
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