The neutral rate of interest – or the rate of interest consistent with the economy remaining at its potential rate of output and inflation remaining at target level – appears to have declined over the past 30 years in the United States and is now at historically low levels.
* * * We thank the Senate Committee on Banks, Financial Institutions, and Currencies for giving Bangko Sentral ng Pilipinas (“BSP”) the opportunity to share its insights and position on the legislative measures relating to the enactment of Financial Institutions Strategic Transfer Act (“FIST Bill”).