UPDATE 1-Philippine c.bank holds rates steady but maintains dovish tone

* BSP keeps RRP rate at record-low 2.0%
* Central bank says inflation to remain within target
* Rates cut by total of 200 bps this year

(Adds quotes, inflation forecasts, background)
By Neil Jerome Morales and Enrico Dela Cruz
MANILA, Dec 17 (Reuters) - The Philippine central bank left
key interest rates steady at its last policy meeting in 2020
after a series of rate cuts earlier in the year aimed at
reviving a pandemic-hit economy, but signalled readiness to take
further action if needed.
The Bangko Sentral ng Pilipinas (BSP) kept the rate on the
overnight reverse repurchase facility PHCBIR=ECI at a record
low of 2.0% on Thursday, in line with market expectations.
The rates on the overnight deposit and lending facilities
were likewise kept at 1.5% and 2.5%, respectively.
"The Monetary Board is of the view that monetary policy
settings remain appropriate," BSP Governor Benjamin Diokno said.
"An accommodative monetary policy stance, together with
sustained fiscal initiatives to ensure public welfare, should
quicken the economy's transition toward a sustainable recovery,"
he said.
The BSP slashed rates by a cumulative 200 basis points this
year, including a surprise 25 bps reduction last month, making
it one of the most aggressive central banks worldwide in policy
easing.
It has also provided additional liquidity support to the
economy by purchasing government securities and extending loans
to the government.
Still, Diokno said the central bank "remains committed to
deploying its full range of instruments as needed" to support an
economy that shrank more than expected in the third quarter on
an annual basis, hit by tepid demand and government spending.
The sluggish domestic demand has kept inflation largely
manageable.
The BSP raised its inflation forecasts to 2.6% this year
from 2.4% previously, and to 3.2% for next year from 2.7%, still
well within the target range of 2%-4% for both years.
"We believe the BSP is slowly running down its available
space to cut rates although we do not count out future rate cuts
especially if economic activity remains subdued early on in
2021," said Nicholas Mapa, a senior economist at ING.