Philippines: BSP expected to keep monetary policy unchanged – UOB

The Bangko Sentral ng Pilipinas (BSP) is forecast to maintain the key rates unchanged at its meeting on Thursday, suggested Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group.

Key Quotes

“With Jan inflation print surpassing both BSP’s monthly and medium-term target range, we believe the central bank will remain on hold at next Thursday’s (11 Feb) Monetary Board meeting. It will likely leave the overnight reverse repurchase rate at 2.00% while monitoring closely the development of price pressures and pandemic."

"Taking BSP’s inflation targeting mandate and past rate actions as a guide, if the negative real interest rate (Jan: -2.2%; Dec: -1.5%) continue to edge up and exceed 3.0% level in coming months, it will put BSP under further pressure to reverse its accommodative monetary policy stance this year and hike rates sooner than expected.”