July 11, 2014 / 3:56 AM / 3 years ago

Philippine c.bank sees room for 'measured' policy tweaks

MANILA, July 11 (Reuters) - The Philippine central bank sees enough room to tweak monetary policy without hurting the country’s economy, a deputy governor said on Friday.

“Domestic demand conditions are likely to remain broadly resilient, suggesting there is room for measured policy adjustment without duly dampening the country’s growth momentum,” Diwa Guinigundo told reporters at a briefing.

Guinigundo said domestic liquidity growth “remains strong and continues to pose a risk to inflation.” The central bank has a 2014 inflation target of 3 to 5 percent.

The central bank has taken several modest steps to tighten liquidity and tamp price pressures so far this year, via adjustments on its short-term special deposit accounts facility and banks’ required reserves.

But some economists believe its next step will be more forceful - a hike in its policy rate from the current record low of 3.5 percent - after inflation averaged 4.2 percent in the first half. (Reporting by Karen Lema; Writing by Siegfrid Alegado; Editing by Richard Borsuk)

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