Twin move leaves Philippine policy "neutral"

The Philippine central bank announced a sharp reduction of rates from 7.5 to 6% on 12 July. The move was, however, accompanied by the abolition of a policy of paying lower interest on large deposits with the central bank.

The staggered-rate policy was introduced in November last year to encourage banks to lend money while it kept benchmark rates unchanged to cool inflation.

Early suggestions are that this unorthodox policy appeared to work. Bank loans grew by 12% in April, the fastest pace in

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