MANILA, Philippines — The Bangko Sentral ng Philipinas is prepared to ease monetary policy next year if the economy slows further and if the inflation outlook remains manageable, Governor Amando Tetangco said Monday.

The central bank could either cut interest rates, reduce banks' reserve requirement ratio, or both, with inflation seen tapering off towards year-end and into 2012, he said.

''The Monetary Board is prepared to consider, if the economy slows down further, possible easing of monetary policy next year,'' Tetangco said in an interview with Reuters in his central bank office near Manila Bay.

Meeting the growth targets this year and next year ''will be a challenge,'' he said, as he stressed the need for the government to boost growth by increasing spending.

The government has forecast growth of 4.5 to 5.5 percent this year and 5-6 percent in 2012, but it has acknowledged the 2011 goal would be difficult to hit after weaker-than-expected GDP growth in the first nine months.

Tetangco also said the peso has been more or less steady and has sustained its relative competitiveness, helping dampen imported inflation. The peso is supported by a strong balance of payments surplus, which the central bank expects to reach $10 billion this year, higher than a previous estimate of $6.7 billion, although the surplus was expected to narrow to $2.8 billion in 2012.

Policymakers kept interest rates at 4.50 percent for a fifth meeting in a row on Thursday, arguing credit growth remained strong and liquidity in the financial system was ample. (Reuters)