The Bangko Sentral ng Pilipinas will likely keep the benchmark interest rates steady during the penultimate policy meeting for the year on Thursday, amid the current stable level of the peso and on expectation that inflation will return to the target range in the coming months, economists said Tuesday.
“By many measures, policy settings in the Philippines is still too loose. However, we are leaning towards the possibility [just barely] that Bangko Sentral ng Pilipinas would stand pat on Thursday after a cumulative 150 bps hike thus far this year,” strategists Eugene Leow and Neel Gopalakrishnan of the DBS Group Research said in a report.
They said after multiple quarters of strong GDP growth, overheating signs were now apparent in elevated inflation numbers and a deteriorating current account balance. They said after multiple rate hikes, the real policy rate was still negative [-2.2 percent] and against a challenging global backdrop, tighter policy might be more prudent.