RP to cut interest rates

RP to cut interest rates

MANILA, Philippines (AP): The Philippines has pledged to the International Monetary Fund that it will cut interest rates to match levels in the United States and its Asian neighbors, a senior finance official said Wednesday.

The switch will be made from the current method of calibrating rates to the peso's movements, said the official, on condition of anonymity.

The decision will be welcomed by the government, which has been trying to boost the economy with low interest rates, while giving a policy headache for the central bank as it grapples with a weak peso.

Manila's latest commitment to IMF is one of several economic and fiscal measures undertaken by President Joseph Estrada's administration in return for drawing a further tranche of a US$1.34 billion IMF loan. The agreement is to be signed in Washington in late September.

The talks concluded this week in Manila between the Philippines and an IMF mission, according to the finance official.