By Cris Larano

MANILA--The head of the Philippine central bank said Thursday he expects the U.S. Federal Reserve to raise interest rates this year.

"As expected the Fed kept rates on hold. Its relatively positive outlook on the U.S. economy suggested it is on track with policy tightening this year," Bangko Sentral ng Pilipinas Governor Amando Tetangco said in a statement. He said the Fed's latest decision was "roughly consistent with what we have incorporated in our baseline scenario."

The Philippine central bank has kept policy rates unchanged since last year's introduction of its interest-rate corridor, which has a floor of 2.5% and a ceiling of 3.5%. Some economists have said they believe the BSP will stand pat for the rest of 2017, while others expect it to begin a tightening cycle in the second half.

"We will note this development at our policy meeting next week, as well as the inflation outlook over the policy horizon," Mr. Tetangco said Thursday.

Write to Cris Larano at cris.larano@wsj.com

(END) Dow Jones Newswires

February 01, 2017 23:14 ET (04:14 GMT)

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