By JIMMY CALAPATI

The coordinated rate cuts by major central banks around the world plus improved inflation prospects gave the Bangko Sentral ng Pilipinas "greater monetary policy space" according to Gov. Amando Tetangco.

"We will continue to monitor the evolving situation to make sure our assessment is fresh and our policy stance appropriate," he said in a text message from New York where he is attending the annual meetings of the International Monetary Fund and World Bank.

Deputy Governor Diwa Guinigundo said the current neutral policy was appropriate.

"Easing price pressures in an increasingly uncertain external environment are best addressed by keeping the rates steady," he said in a text message to reporters.

On Wednesday night, Guinigundo had said: "We need to ensure we don’t just put down our guard against any premature easing."

The US Federal Reserve led the unprecedented joint action with a half percentage point cut on Wednesday, and China, the European Central Bank and central banks in Britain, Canada, Sweden and Switzerland followed suit.

The coordinated policy move was aimed at helping markets shake off uncertainties related to the worst financial crisis in about 80 years that toppled banks in the United States and Europe.

South Korea and Taiwan followed the lead by the world’s largest economies with quarter percentage point cuts on Thursday, helping regional markets shake off overnight losses on Wall Street in spite of the joint easing.

"The situation in our financial system is very different from the problems they are dealing with there, but we do have to be responsive to the consequences in the US macroeconomy and in Europe as we set our policy," another deputy governor, Nestor Espenilla, said in a television interview.

The BSP kept its key policy rates on hold on Monday, skipping a rate rise for the first time in four meetings, after inflation peaked in August and is likely to decelerate further to single-digit levels by the first quarter of 2009.

Overnight rates are at 6.0 percent for borrowing and 8.0 percent for lending.

The central bank raised its policy rates by 100 basis points in three straight meetings to August to rein in inflation.

Inflation in September contracted month-on-month for the first time since March 2007 although annual core inflation climbed to 7.5 percent last month from 7.0 percent the previous month.

Finance Secretary Gary Teves said that the government is ready to provide assistance to crisis-stricken sectors, if necessary.

"The economic and fiscal reforms that we have implemented in recent years have also given us the flexibility to provide assistance to affected sectors, if necessary," Teves, who is also in the US, said in a text message.

He said that the Philippine economy has shown resilience in the face of global market uncertainties.

"While we are not completely insulated from these external shocks, we can withstand further pressures if we continue to be vigilant and maintain confidence in our country," he added.

According to the Finance secretary, these global challenges underscore the need to strengthen the domestic economy and make industries more self-reliant.