MANILA, Oct. 1, 2009 (Xinhua News Agency) -- Philippine monetary officials decided to keep key policy interest rates on expectations that inflation level will remain benign for the rest of the year, the Philippine central bank said on Thursday.

The overnight borrowing rates or reverse repurchase facility ( RRP) is steady at 4 percent while overnight lending or repurchase facility (RP) is at 6 percent. The interest rates on terms RRPs, RPs and special deposit accounts were also left unchanged.

"The latest forecasts continue to indicate within-target inflation over the policy horizon," central bank officer-in-charge Nestor A. Espenilla, Jr. said in a press briefing. Espenilla said that by maintaining policy rates, econmic growth can be sustained in a low inflation environment.

This is the second consecutive time that the Monetary Board has decided to pause its monetary easing policies. They have been reducing policy rates since December 2008 to ensure domestic liquidity amid the global recession. But news that the the global recession is bottoming out has spurred monetary officials to rein in the reduction in key rates.

Espenilla said that there are signs that domestic consumption is picking up, although investments and the labor market remain weak. He added that the Monetary Board expects the global economic recovery to be slow, which is why "caution needs to be exercised in assessing the sustainability of domestic demand in the Philippines."