RTTNews - Thursday, Philippines' central bank reduced its policy rates by another 25 basis points to a 17-year low after the economic growth slowed notably in the first quarter.

The Bangko Sentral ng Pilipinas lowered its interest rate on overnight borrowing or reverse repurchase facility to 4.25% from 4.50% with immediate effect. That was the lowest level since May 1992. At the same time, the bank lowered overnight lending rate or repurchase rate to 6.25% from 6.50%.

Including the latest cut, the central bank had made a cumulative reduction of 175 basis points in key policy rates since December 2008.

Earlier in the day, the country's National Statistical Coordination Board said the economy grew 0.4% annually in the first quarter, much slower than the 3.9% growth seen in the same period of the previous year.

In this connection, the decision to lower policy rates could provide additional boost to spending and investment in the economy and support market confidence, the central bank said in a statement.

The Board observed that while there are encouraging signs that the global slowdown may be bottoming out, it is too early to conclude that global economic conditions are clearly moving towards normalcy, the bank added.

Further, it said the central bank is prepared to move quickly to address potential risks to price stability while continuing to support domestic activity consistent with a non-inflationary path.

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