The Bangko Sentral, which cut its key interest rate to a 16-year low this month, needs to consider easing monetary policy further to boost economic growth, Deputy Gov. Diwa Guinigundo said yesterday.

“We can afford to be accommodative,” Guinigundo said in a speech. Bangko Sentral has room for “preemptive and swift action” and needs to consider opportunities to further loosen its policy, he said.

The central bank may reduce the amount of funds banks are required to set aside as reserves and lend them more money, Guinigundo said. The government forecasts economic growth may weaken to an eight-year low in 2009 as the global recession cuts exports and damps remittances from overseas nationals.

Remittance growth slowed to 0.8 percent in December, the weakest pace in more than two years. Funds sent home by Filipinos working overseas, which account for about a 10th of the $144-billion economy, likely picked up in January when the exodus of Filipinos remained “strong,” Guinigundo said.

Still, the bank is in the process of revising its assumption that the peso will average 45 to 48 per dollar this year, he said.

“We have to be more realistic,” Guinigundo said.

The peso closed at 48.565, slightly down from 48.550 on Thursday. It has fallen 2.3 percent this year, following last year’s 13 percent slump.

The central bank expects the nation to maintain its balance-of-payments surplus, which will support the peso, Gov. Amando Tetangco said yesterday.

The currency’s fluctuations are “manageable” and the bank will stick to its practice of “smoothening volatility” rather than trying to defend a specific exchange rate, he said.

The Philippines is able to withstand the global slump because its economy continues to grow, its banks are “stable” and foreign reserves are at record highs, Tetangco said.

“Our reserves are at about six months” of imports, Tetangco said at a conference. “In 1997, our gross international reserves were two months. We have better coverage now. We are not totally immune but we are in a better position to weather the crisis.”

The central bank has cut its benchmark overnight borrowing rate by 1.25 percentage points to 4.75 percent in three meetings starting December. Bloomberg