The Monetary Board of the Bangko Sentral ng Pilipinas yesterday announced it maintained key policy interest rates at 7.5 percent for the overnight borrowing or reverse repurchase rate and 9.75 percent for the overnight lending or repurchase rate.

The Board said in a press statement that assessment of recent economic data continues to support keeping policy settings unchanged, adding that the sustained easing of core inflation, combined with indications of weaker demand based on consumer spending data and slowing domestic liquidity growth, suggests minimal demand-side pressures on goods and services in the near term.

The impact of rising inputs costs on consumer prices also remains muted, it said, and the strength of the peso also help offset potential near-term pressures on the cost side.

The Board said that monetary authorities believe that the impact of the Reformed Value-Added Tax will unlikely fuel a sustained rise in inflation, the press statement said.

It added that the BSP also fully supports the non-monetary measures of the national government to address sharp price increases in major commodities and services and remains focused on achieving the inflation target for 2007 and addressing the risks to future inflation.*

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